Are We Headed For a Terrible August Unemployment Report?

As the first Friday of September nears, the market begins to wonder what the government's official unemployment report for August will indicate. The past few months have been broadly disappointing. Jobs were lost June and July. Though the net declines were driven by Census firings, the private sector job growth was very weak. Moreover, the other August unemployment data we've see so far doesn't look very promising. What will we learn tomorrow? Place your bets below.

First, initial unemployment claims were rising throughout much of August. In the early part of the month, initial claims rose above 500,000 for the first time since November 2009. But continuing claims continued to decline to below 4.5 million as the month ended to the lowest number since late December 2008. Although this data is mixed, it certainly doesn't indicate broad improvement.

Indeed, ADP's monthly unemployment report showed that 10,000 jobs were lost. This is particularly troubling, as ADP only tracks private sector jobs -- meaning that the Census data isn't to blame here. It was the first monthly ADP report since March to indicate job losses.

For some optimism, however, you can look to the Challenger, Gray & Christmas, Inc. report (.pdf). It said planned job cuts dropped to 34,768 -- its lowest monthly total in over a decade. Of course, if firms are laying people off fewer workers, then any hiring activity will result in a better net jobs number.

Last month, readers did pretty poorly predicting that the unemployment rate would remain constant at 9.5%. Just 6% of respondents got it right. But you did much better on jobs lost. An impressive 32% correctly predicted that losses would fall between 100,001 and 200,000.

Again in August a fair number of job losses are expected related to temporary Census workers finishing up their work. Consequently, it's relatively likely that the U.S. economy failed to add net jobs. But if the private sector also began to pull back, then that would be especially troubling. We'll know soon enough, so for now vote in the two polls below on the headline numbers that will be reported Friday for the unemployment rate and jobs added/lost.