ADP said the private sector added a net 55k jobs in May, below expectations of 70k but April was revised higher to a gain of 65k up from the initial report of 32k. Thus, taken together, the figure was about in line with forecasts. While it’s great to see job gains again, the pace is still punk relative to absorbing the monthly new entrants into the labor force. Confidence in the sustainability of the recovery and confidence in the public policy outlook still remain the stumbling block to a sharper improvement in employment. The jobs gain was led by the services index where small and medium sized businesses added 74k jobs. The goods producing sector shed 24k jobs but manufacturing specifically added 15k. Construction employment fell by 41k and the financial services industry lost 8k jobs. To highlight the disconnect between ADP and Gov’t private sector Payrolls, ADP Apr jobs gain was 65k and the Gov’t had it at 231k. Apr ADP was 32k, Gov’t was 174k.
Initial Jobless Claims totaled 453k, 2k less than expected but the prior week was revised up by 3k to 463k. The 4 week average did tick up to 459k, a 4 week high and points to the still mixed labor market where jobs are being created while initial claims remain elevated. Continuing Claims rose by 31k and those collecting Extended Benefits rose a net 56k. If the current unemployment benefit extension passes in Congress, benefits will remain up to 99 weeks in some states. The uncertainty of this though may be impacting the claims data as the prospect of losing benefits creates a greater urgency to find a job and vice versa if the bill passes and eases the urgency.
