More Economic Churn: Challenger Announces "Surge" In Planned Job Cuts As Noisy ADP Private Payroll Beats Expectations

Tyler Durden's picture

Another day, another set of completely contradictory economic numbers. First, in an earlier release Challenger announced that employers planned on firing 48,711 people in November compared to 37,986 in October, led by a "surge" in the non-profit sector where 10,761 layoffs were pending. "Government and non-profit job cuts are down 16 percent from a year ago,
but that is probably little consolation to employees in the sector,
which is still struggling despite signs of recovery in other areas of
the economy," John A. Challenger, chief executive officer of Challenger,
Gray & Christmas, said in a statement. This was the highest downsizing number reported in 8 months. And then less than an hour later, ADP comes out with its traditionally noisy number that tends to have zero correlation to the upcoming NFP result, and observes that the churn in the labor force is starting to pick up, with a change in private payrolls of +93K compared to expectations of 70K, and a prior revised number from 43K to 82K. This was the highest since November 2007. Net net: more people hired, more people fired. Judging by the futures response, this is good.

From ADP:

Nonfarm Private Employment Highlights -- November Report:

-- Total employment: +93,000

-- Small businesses* +54,000
-- Medium businesses** +37,000
-- Large businesses*** +2,000
-- Goods-producing sector: +14,000
-- Service-providing sector: +79,000
-- Manufacturing industry: +16,000

According to the ADP Report, employment in the service-providing sector rose by 79,000 in November, the tenth consecutive monthly gain. Employment in the goods-producing sector rose by 14,000, the first monthly increase since March 2007. Construction employment dropped by 3,000 during November, the smallest decline since June 2007, and manufacturing employment increased by 16,000.

"Although most segments of the U.S. private sector have experienced some positive job growth recently, the unemployment rate has remained stagnant for around eighteen months," said Gary C. Butler, President and Chief Executive Officer of ADP. "Most businesses still have little reason to add to their payrolls due to the ongoing uncertainty in the economy. To support job creation, our nation's policymakers should do their part to create an environment of reasonable economic certainty by clearly defining key tax and regulatory policies. Reduced economic uncertainty, along with appropriate near term incentives for businesses to invest and expand, will encourage businesses to hire."

According to Joel Prakken, Chairman of Macroeconomic Advisers, LLC, "This month's ADP National Employment Report shows an acceleration of employment and suggests the nation's employment situation is brightening somewhat. November's gain in private-sector employment is the largest in three years. This is the tenth consecutive month of gains, which have averaged 47,000 during that period. Nevertheless, employment gains of this magnitude are not sufficient to lower the unemployment rate, which likely will remain above 9% for all of 2011. Furthermore, given modest GDP growth in the second and third quarters, and the usual lag of employment behind GDP, it would not be surprising to see several more months of only moderate gains in employment even as the economic recovery gathers momentum."

H/t Mark's Market Analysis

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unwashedmass's picture


hey, it allows a major pump o rama until noon, when we all find out that our government handed over three trillion to our favorite people.....

and the irish think they can beat us!!! Hell, most of us here didn't even know we were a rape in progress...

firstdivision's picture

Not only that, but the MBA report was pretty lousy as well.  I wish I could figure out what has caused futures to pop 15 points since 1 am, but I cannot find one.  Wait maybe this accounts for the "magical" pop

Rick64's picture

Supposedly good manufacturing numbers in Great Britain at a 16 yr. high, and China reported robust gains in manufacturing.

scatterbrains's picture

that overnight ramp was fed by the massive sale of e-minis at yesturday's close by the bank cartel.. they then bought them back into the globex vacumm lift. On another note.. big down moves in bonds and dollar at the same time. Who was it said keep your eye out for such things..  start of the avalanche ?

Dismal Scientist's picture

Hhhm. 'ADP comes out with its traditionally noisy number that tends to have zero correlation to the upcoming NFP result'.

You sure about that Tyler ?

jkruffin's picture

Today, and other days like today, where the S&P is pumped up in the pre-market to unsustainable levels, are the perfect days to pull a little more of your money out of this scam...before its too late.

HelluvaEngineer's picture

People are just "downsizing" their career.  Example: you used to be a middle management suckup at a marketing firm.  Now you're an up and coming burrito specialist at Chipotle.

pat53's picture

Gotta feel sorry for anyone who shorted into that little dive at the close yesterday. Should rally strong now thru Friday.

firstdivision's picture

Not going to happen as we have hit the top of this trading range.  Now would be a good time to start to get ready to short. 

HelluvaEngineer's picture

Agree totally.  I think we're finally seeing a trend where you short the pops.  I might pick up a piece of VXX around the time POMO ends, or near market close.

unwashedmass's picture


i do individual stocks, not indices...and i have to say, there is NO volume whatsoever in most....the Fed is pumping its little heart out but....

the peasants aren't coming into to take the bag of turds off the banks' hands at this level (why? don't you want AMZN at 180 in a deteriorating market? its a BUYING OPPORTUNITY)....

there is NO volume, i repeat NONE in anything other than the naughty stocks that the peasantry isn't supposed to know about or want to buy -- gold and silver....

somehow, people aren't being quite as dumb as Ben believes in his cold heart that they are.

mule65's picture

Why QE2 with so much good news?

Sudden Debt's picture

to get that kind of news you need expensive propaganda agancies which don't come cheap.

TWORIVER's picture

GOLD trade for the day: Short at 1390 vs 1400 stop. Longs having it their way til now, watch 1365 with a sense of urgency. Have a good one.

unwashedmass's picture


you may be right, but i wouldn't want to be short gold when the 3T news hits at noon...

that could be the tipping point for all confidence in anything.

TWORIVER's picture

Hear ya. This is just a technical trade. The potential H&S is still there unless we see a move over 1400. Yesterday's low of 1365 is paramount for longs.

unwashedmass's picture


the H&S trade is a JPM paint job.....they are dreamin' if they think they are going to be able to engineer another smash and grab now....

word is out about those guys and the manipulation of the gold/silver markets. hell, people ON THE YAHOO BOARDS are talking about it and watching and waiting for the "attacks" ......


TWORIVER's picture

It's not a paint job, it is either a top or a consolidation pattern. The volume flows suggest that it is a top.

sushi's picture

Do any of the stats indicate how many Americans grope other peoples junk for a living?

wiskeyrunner's picture

So whay are you not reporting on the Federal Reserve Recipients of 3.3 trillion in tax payers money ????????????????????????????????????  

Tyler Durden's picture

We are prepared for the noon announcement.

Precious's picture

Who would have predicted... Ben Bernanke is doing under order of the courts, what Julian Assange is doing for free. Next thing you know, Bernanke will be wanted by Interpol.

Cognitive Dissonance's picture

No, they aren't doing it under the courts. They are releasing what they want to release. This is a controlled release to control the discussion, questions and answers.

We don't even know how accurate the info is. We are entirely dependent upon a Fed to do as they say they are doing. It would be dumb of us to assume we are getting it all even in the sections they say they are releasing. Period.

shushup's picture

I don't know how anyone can get excited about 93K jobs when 17 million are out of work.

Kina's picture

The economy is bouncing along the sea floor. The seas floor ain't perfectly flat.

ziggy59's picture

what me worry? 1800 new jobs per state  hoo hooo...

up up up...

controlled demolition..take down when they want


Sudden Debt's picture

The real question is why the other 17 mil. don't want to work!

Are they lazy?

Should they no longuer profit from the royal food stamp programms?

Answer= Yes, they should all be put into working camps.

papaswamp's picture

Are these full or part time jobs? Are we looking at a surge due to the holidays or are things at the very least bottoming out.

Kina's picture

J6P is going to be stunned when all this crashes in a heap. I was told everything was gettin better, the market soaring...what happened?


We was lying to ya joey. There ain't no pot of gold for you ya see. You were just the pastsy, now skiddadle.

MrTrader's picture

Skynet has decided to squeeze all shorts. Target successfully executed. Today Skynet plans to destroy all longs. You better listen to Skynet. Skynet end.

the not so mighty maximiza's picture

Just buy high and sell low,  what could go wrong?

Sudden Debt's picture


Aductor's picture

Oh, c'mon. We all know it's going to rally for some arbitrary reason. The Ben Bernank & Co would not like to ruin Christmas, what would happen to the "animal spirit" then? That the US and most of EU is totally insolvent is quite irrelevant.

Larry Darrell's picture

The Ben Bernank & Co would not like to ruin Christmas......for all of those wealthy people with stock investments.

There, fixed it for you.

The people rolling off the extended unemployment benefits will feel the opposite effect this year and have a horrible Christmas unless .gov gives another extension.

John Law Lives's picture

There is not much value in citing job creation numbers unless the nature of each job is quantified.  If high wage jobs are being replaced with low wage jobs, that is not much reason to celebrate the data.  Furthermore, many of the jobs being created right now might be temporary in nature.  Then again, mindless HFT bots do what they are programmed to do...  THEY PUMP when the pumping is good!

doggis's picture

this in today from Greg Hunter from USA Watch dog:


With all the attention stories such as WikiLeaks and Irish bailout have gotten the last few days, a bombshell judgment against Bank of America in a New Jersey foreclosure case has been overlooked.  The judgment happened 2 weeks ago in a case involving the home of John T. Kemp.  His original mortgage company was Countrywide, but it was bought a few years back by B of A.   U.S. Bankruptcy Judge Judith Wizmur rejected a claim by Bank of America to foreclose on Kemp’s home.   According to a Bloomberg story yesterday, Bank of America had failed to deliver the note to the trustee. That could leave the trustee with no standing to take the property, and raises the question of whether other foreclosures could similarly be blocked.”   According to one witness, this was a common practice.  The Bloomberg story goes on to say, “Linda DeMartini, a team leader in the company’s mortgage- litigation management division, said during a U.S. Bankruptcy Court hearing in Camden last year that it was routine for the lender to keep mortgage promissory notes even after loans were bundled by the thousands into bonds and sold to investors, according to a transcript. Contracts for such securitizations usually require the documents to be transferred to the trustee for mortgage bondholders.”  (Click here to read the entire Bloomberg story.)

 This is an earth shaking setback, not only for B of A, but for all banks involved in mortgage-backed securities.  The Promissory Note is the actual proof the bank owns the home.  No “note” means no proof of ownership.  You must possess the original Promissory Note for ownership to be valid.   I wrote about this enormous mortgage mess in an October post called “The 6 Trillion Dollar Problem.” I said, “The lack of the Promissory Note is the biggest of all the problems in this chain of chicanery.  Here’s why.  A Promissory Note is a financial instrument.  It is in the same family as a Federal Reserve Note.  For example, if you copied a $100 bill and then tried to spend that copy in a store, because you lost the original, is it still money?–Of course not.  You need the original financial instrument (in this case a $100 Federal Reserve Note) to make a legal transaction in a store.  The same is true for a Promissory Note. You need the original note to legally complete a foreclosure.  A counterfeit or copy of a Promissory Note is not a financial instrument, just like a counterfeit or copy of a $100 bill is not a financial instrument!”

No Promissory Note means banks like B of A sold un-backed securities instead of mortgage-backed securities.  This is not a simple case of sloppy paperwork as the mainstream media would like you to believe.   The evidence suggests it is layer upon layer of widespread criminal activity.  Here’s the way I explained it in a post called “The Perfect No-Prosecution Crime.”  In October, I wrote,There was “rampant” mortgage fraud in the loan application process according to the FBI as far back as 2004.  (Click here to see one of many stories of the FBI warning of mortgage fraud.)  There was real estate document malfeasance when the original Promissory Notes and loan documents were “lost.”   The Promissory Notes were required to create tens of thousands of mortgage-backed securities (MBS).  No “note,” no security.  No security means the special IRS tax status for the MBS were improperly obtained.  Because there were no documents, the rating agencies fraudulently made up triple “A” ratings for the securities.  When the whole mess blew up, big banks hired foreclosure mill law firms to create forged documents.  That phony paperwork was and is being used to wrongfully remove homeowners from their property.  That is foreclosure fraud.” 

Mortgage-backed securities have to meet what is called “contractual representation and warranties.”  That basically means the MBS are required to be free of fraud and be exactly what the seller says they are.  Do you think mortgage-backed securities are free of fraud?  Do you think these securities are the triple-A rated risk free investment the big Wall Street banks claim?—NO WAY!  The banks are going to be forced to buy back all the toxic mortgage junk they sold. 

 That is the least they can do because, so far, there has not been a single prosecution of a high ranking mortgage lender or Wall Street banker.  That is outrageous because this will surely go down as the biggest financial white-collar crime rip-off in history.

Cognitive Dissonance's picture

Judging by the futures response, this is good.

Futures were being moved up nearly from the close yesterday. This is and was a managed move higher. Futures no longer have anything to do with "news" or "events" and everything to do with a manipulated market.

Sudden Debt's picture

it only takes less then 1 minute to go from +1% to -1%

Precious's picture

Who would have predicted... Ben Bernanke is doing under order of the courts, what Julian Assange is doing for free. Next thing you know, Bernanke will be wanted by Interpol.

ElvisDog's picture

A statistic I would like to see released is the total income of people working in the private sector excluding government transfer payments. Like the earlier post said, releasing only the net change in jobs doesn't indicate whether the quality of jobs is decreasing.