Chicago Tribune

CHICAGO – Although the job market may not have a case of the blahs, recent weaker numbers have analysts wondering whether the economy is beginning to lose momentum, and whether the Federal Reserve may be going too far in clamping down on credit.

Last week’s move by the central bank to elevate short-term interest rates, a 17th monetary squeeze in less than two years, is creating concern that construction hiring, the area most vulnerable to such pressures, will tumble too far, too fast.

That brings us to Friday’s June employment report. Chicago economist Paul Kasriel is looking for a slight uptick in joblessness, to 4.7 percent, while payrolls show a moderate gain of 130,000 positions, a bounceback from the weak 75,000 in May.

“The story is that the economy is headed toward a slower growth path, and there is little doubt that job formation will be affected,” said Kasriel, of Northern Trust Co.

The result of the Fed’s monetary tightening effort will be weaker expansion not only in housing but in consumer spending, Kasriel said.

The good news is that job growth isn’t grinding to a halt, he said.

Poor auto numbers

Times have been tough for domestic automakers as foreign rivals, astronomical gasoline prices and higher interest rates are driving sales into the slow lane.

More dismal numbers are expected for Detroit on Monday, with June car and light truck sales. An executive of General Motors Corp. said that the figures “are going to be brutal.” The auto giant immediately slated an end-of-month promotion offering zero-percent financing for up to six years. The special deals will end Wednesday.

One reason year-over-year comparisons can’t match last summer’s increases, according to analysts, is that the 2005 season saw employee discounts for all buyers. That revved up traffic in showrooms. The carmakers, however, have pledged not to repeat similar fire-sale specials this year.

Today unproductive

If you go to a place of business Monday, don’t be surprised if the place is half empty – or closed.

While not officially a holiday, Monday could rank alongside Christmas Eve day and New Year’s Eve day as the least productive work sessions during the year, according to John A. Challenger, chief executive of Chicago-based Challenger, Gray & Christmas, Inc.

“With the national observance of Independence Day on Tuesday, workers around the country will try to get a four-day weekend out of it by taking off Monday,” he said.

He added that those who show up for work may regard it as “a day to take it easy.”

Meanwhile, the stock market, which is open Monday, will be looking ahead to second-quarter corporate profits.

Analyst Dirk Van Dijk of Zacks Investment Research believes they will show growth exceeding 8.33 percent, which is a consensus of analysts. In the first quarter, earnings grew about 12 percent from a year earlier.