ADP and Challenger Reports: Will Rising Oil Prices Impact Employment?

Steven Hansen submits:

By John Lounsbury and Steven Hansen

Is this month?s employment situation a lagging indicator of the underlying economic dynamics? Econintersect has long argued that employment is a leading dynamic of the current economy.

Both of these views are true ? depending on your perspective.

Poor employment rates (employment to population ratios) do not allow the economy to reach its potential ? for this reason, employment trends become a leading indicator of the economy.

But there is a troubling undercurrent in otherwise improving employment data - oil prices are rising and energy prices can be economy killers, as shown by James Hamilton. The insidious impact of oil price increases likely are beginning to be felt in the core of the economy ? but not yet working its way into the employment data.

But there are possible indications of employment problems in the Challenger data reviewed in this post. However, the ADP

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