Wednesday's Indicators

Today's important indicators focus on trends in or affecting the US labor market.  The ADP US private-sector employment report, which surprised on the downside last month (i.e. its projection for job losses was for too many losses), is forecasting losses of 298,000 in August.  This figure is down from the 371,000 forecasted for June, which was revised down to 360,000.  Please note that this indicator, provided by the private-sector company ADP (i.e. not a government entity), excludes the government sector.  On Thursday, weekly first-time and continuing unemployment claims come out, and on Friday, of course, the sacred First Friday Labor Department employment reports are  to be exhibited to their countless devotees in the markets and in government (not to mention the rest of us).  Bloomberg notes that the private sector losses were greater than forecast, so it'll be interesting to see if the undershoot on the downside in July's government report estimates, which was greeted with adulation (but not much of a market bounce) in early August will be matched by disappointment on the markets, if it materializes, on Friday.

Factory orders were up in July, but not as much as forecast, and an outsized part of the activity was in aircraft production, which doesn't mean it's very sustainable (aircraft, as one might imagine, tends to be a one-off sort of purchase).  This type of growth may look hard to square with yesterday's upturn in manufacturing (which showed strong growth for homebuilders and autos), but this is a July figure, and the manufacturing report was for August.  Meanwhile, the revised 2Q productivity figure stayed at its stratospheric level of 6.6% (it was supposed to be trimmed down to 6.1% or so).  Unit labor costs were revised downward (meaning workers are getting screwed more) by .1%, to 5.9% from 5.8%.

Also, US mortgage applications fell, as did loan requests (for the first time in three months).

US employment situation continues to deteriorate in fiscally-strapped urban areas to a particularly disturbing extent, as this WSJ piece documents.

Finally, in accordance with our philosophy of widening the category of "economic indicators" beyond that focused on by wilfully short-sighted investors and economists, it seems that opium production in Afghanistan is down by 20%.  Opium is Afghanistan's largest export by far, and accounts for 90% of the world's refined heroin.  It's not only  important for this country and region, but its precedence (though down, it seems its for supply reasons, as the article states, not so much from eradication/substitution measures taken by the "authorities"--many of whom are involved in the trade)reflects that fact that the US and NATO have precious little control over the fiefdom they inherited from the Taliban in 2001.  And that lack of control, combined with an almost certainly half-baked escalation strategy by the US, will quite possibly cost US taxpayers (never mind Afghan citizens, of course) increasingly over the next few--probably highly penurious already--years.