Dec. 2, 2009 – 7:35 a.m. CT

Firing Fatigue

The ADP report on employment for November, which is actually more comprehensive than the government's initial report due out this Friday, suggests that the pace of layoffs continued to slow in November as employers got tired of firing. Losses in construction and manufacturing, in particular, moderated. We have already cut to the bone in those categories.

This, coupled with a favorable adjustment to seasonal trends, suggests that nonfarm payrolls, which will be reported for November on Friday, declined by about 100K. The unemployment rate should dip temporarily after surging to 10.2% in October. The underlying trend in unemployment, however, will remain up for some time to come. A similar phenomenon occurred last spring.

The Bottom Line: You can't get blood from a turnip, and employers have already stretched the remaining workforce extremely thin. That said, nobody is exactly excited about hiring, and risks of a secondary slowdown in growth remain high. As a result, Main Street is expected to continue to feel the lingering effects of the recession for some time to come.

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