TrimTabs' Preliminary Data Suggests U.S. Economy Will Lose at Least 200,000 Jobs in June as Census Bureau Starts Massive Layoffs

SAUSALITO, Calif., June 10 /PRNewswire/ -- TrimTabs Investment Research reported that based on preliminary data, the U.S. economy is likely to lose at least 200,000 jobs in June.  That is because the Census Bureau is projected to lay off more than half of the 525,000 temporary workers it hired from March to May to conduct the 2010 Census.

TrimTabs, which bases its job estimates on daily income tax data, said the June losses will be partially offset by positive but weak private sector job growth.  If tax deposits from the rest of June are consistent with the first week, TrimTabs estimates that private sector job growth will be an anemic 50,000 to 75,000 jobs.

"Once again, investors shouldn't let the headline job loss number mislead them," said Madeline Schnapp, Director of Macroeconomic Research at TrimTabs.  "Job growth is likely to be sharply negative because the Census Bureau is laying off temporary workers, not because the economy is weakening dramatically."

In a research note, TrimTabs explained that data from past Censuses was used to project current trends. Those trends have been confirmed by real-time trends in the deposits of withheld income taxes.

"The daily income tax data we track suggests the Census Bureau started laying off those workers last week," explained Schnapp.  "We estimate that 275,000 Census workers will lose their jobs this month."

Schnapp also noted, "The 50,000 to 75,000 jobs that will be added by private sector hiring in June is nowhere near the level of 150,000 jobs per month that's needed to absorb new entrants to the labor force."

TrimTabs pointed out that tax collections are not the only sign the labor market is struggling.  TrimTabs' proprietary measure of online job postings fell in the first week of June, and initial unemployment claims rose to a four-week high of 459,000 in the latest week.

"The economy benefitted early this year from a huge amount of government support, ranging from tax refunds to temporary Census hiring to extended unemployment benefits to the homeowners tax credit," said Schnapp.  "Most of these sources of support are now gone.  Unless the private sector starts to hire more workers, the economy will be in trouble this summer."

TrimTabs Investment Research is the only independent research service that publishes detailed daily coverage of U.S. stock market liquidity--including mutual fund flows and exchange-traded fund flows--as well as weekly withheld income and employment tax collections.  Founded by Charles Biderman, TrimTabs has provided institutional investors with trading strategies since 1990.  For more information, please visit www.TrimTabs.com.

SOURCE TrimTabs Investment Research