June ADP report is lame

ADP said only 13k private sector jobs were created in June. Lame is the first word that comes to mind as it compares to expectations of 60k and the May gain of 57k. It is the 5th month in a row of gains but lumpy remains the theme. The goods producing sector shed jobs for a 39th straight month led by construction, partially offset by a gain in manufacturing for a 5th straight month. The drop in construction jobs was 35k which actually is the smallest decline since July ’08. The Service sector added a net 30k jobs led by small and medium sized businesses as large companies shed a net 3k. The financial services area in particular lost another 10k jobs. Friday’s expectations for private sector payroll gains are 110k and we’ll see today if the ADP report lowers those estimates. Bottom line, relative to the monthly increase in the labor force that is needed to be absorbed by job growth, we are in the midst of a 3rd straight jobless recovery.

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