ADP Jobs Report Prompts Lowering of Job Growth Estimates

The ADP tea leaves are being read today as a warning that the June jobs report, due Friday, isn’t going to be rosy.

No one expects that it will come anywhere close to the 431,000 jobs that were added to the U.S. economy in May. That growth was fueled almost entirely by the hiring of temporary census workers. Remove them from the count and May saw about 20,000 new, private sector jobs.

In fact, the estimates are that the economy will have lost jobs during the month as some of those temporary government workers were laid off. Because the Census Bureau employment is skewing the numbers, the focus since April has been purely on the number of private sector jobs created.

Initial estimates were that the U.S. Bureau of Labor Statistics would report somewhere between 115,000 and 150,000 new, private sector jobs in June.

However, economists were also expecting that the ADP numbers (produced from ADP’s payroll reports) would show June added about 60,000 private sector jobs. In May, ADP said 57,000 jobs were added.

So the 13,000 new June jobs reported in this morning’s release were a surprise. It caused a blip in stock prices and a rise in 30-year Treasury notes as investors sought safe havens. It also prompted analysts to rethink their expectations of Friday’s monthly employment report.

Article Continues Below

According to Marketwatch, Merrill Lynch cut its estimate from 150,000 new private sector jobs to 125,000. Credit Suisse went from 115,000 to 75,000 new jobs.

The lowering expectations matched the public sentiment as measured by The Conference Board’s Consumer Confidence Index., which was also released this morning.  An aggregate of responses from a survey of 5,000 households, the Index dropped 9.8 points between May and June. It was the first decline since February.

“Increasing uncertainty and apprehension about the future state of the economy and labor market, no doubt a result of the recent slowdown in job growth, are the primary reasons for the sharp reversal in confidence,” says Lynn Franco, director of The Conference Board Consumer Research Center. “Until the pace of job growth picks up, consumer confidence is not likely to pick up.”

In that area, The Conference Board said the number of online job openings being advertised improved in June. The Help Wanted On-Line Data Series reported 4,154,128 job openings were online in June, an increase of 19,600 from May.

John Zappe is the editor of TLNT.com and a contributing editor of ERE.net. John was a newspaper reporter and editor until his geek gene lead him to launch his first website in 1994. He developed and managed online newspaper employment sites and sold advertising services to recruiters and employers. Before joining ERE Media in 2006, John was a senior consultant and analyst with Advanced Interactive Media and previously was Vice President of Digital Media for the Los Angeles Newspaper Group.

Besides writing for ERE, John consults with staffing firms and employment agencies, providing content and managing their social media programs. He also works with organizations and businesses to assist with audience development and marketing. In his spare time  he can be found hiking in the California mountains or competing in canine agility and obedience competitions.

You can contact him here.

Topics

Leave a Comment

Your email address will not be published. Required fields are marked *