ADP Job Losses Awful, Doesn't Yet Include the Failure of GM, Chrysler

“The weakness in the labor market is deep and broad and means the recession really could last through the end of this year.” -Steve Cochrane

ADP Says U.S. Companies Reduced Payrolls by 742,000 in March: “Companies in the U.S. cut an estimated 742,000 workers in March, pointing to no relief in sight for the labor market amid the longest recession in seven decades, a private report based on payroll data showed today.

The drop in the ADP Employer Services gauge was larger than economists forecast and followed a revised cut of 706,000 for the prior month.

Companies are slashing staff as tight credit conditions and shrinking household wealth cause sales to shrink. The Labor Department may report in two days that employers cut payrolls in March for a 15th consecutive month, putting jobs losses in the current downturn at more than 5 million, according to a Bloomberg survey.

FN: This is bad. But it will only get worse. These numbers don’t yet include the implosion of both GM and Chrysler and the knock on effects of that on down the supply chain. Job losses will continue to come in at horrific levels for months to come.

Obama Said to Find Bankruptcy Likely for GM, Chrysler (Update2): “President Barack Obama believes a quick, negotiated bankruptcy is the most likely way for General Motors Corp. to restructure and become a competitive automaker, people familiar with the matter said.

Obama also is prepared to let Chrysler LLC go bankrupt and be sold off piecemeal if the third-largest U.S. automaker can’t form an alliance with Fiat SpA, said members of Congress who were briefed on the GM and Chrysler situation before the president said two days ago that the automakers’ viability plans were insufficient.

The president gave GM 60 days to come up with deeper cost and debt reductions than the biggest U.S. automaker proposed in its plan submitted last month. The “quick and surgical” bankruptcy his administration said was also an option appears to be inevitable, said the members of Congress and two other people familiar with the matter. Obama personally signed off on asking GM Chief Executive Officer Rick Wagoner to step down, which he did on March 29, they said.”

FN: I recently wrote that the bankruptcy of GM is Actually Bottom Making Material. This is one of the required purging catalysts. A large number of 'game changing' events like this must occur before the global economy and global financial markets can recover.

You will know them when you see them (because they will change your world and your life).