Initial Jobless Claims Increase; Economists Fear for Tomorrow’s Jobs Report
This isn’t good. The number of Americans filing initial claims for jobless benefits — after holding around 450,000 or 460,000 for weeks — spiked up to 472,000 last week, the Labor Department said. That is a 13,000-person rise. Economists expected claims to decline slightly to 458,000. The four-week moving average was 466,500, the highest level since March.On top of that, yesterday, ADP, a payroll processor, said that private employment edged up just 13,000 jobs between May and June. (That’s 260 jobs per state.)
June’s rise in private employment was the fifth consecutive monthly gain. However, over these five months the increases have averaged a modest 34,000. Recent ADP Report data suggest that, following steady improvement through April, private employment may have decelerated heading into the summer. The slow pace of improvement from February through June is consistent with other publicly available data, including a pause in the decline of initial unemployment claims that occurred during the winter months.
Unlike the estimate of total establishment employment to be released on Friday by the Bureau of Labor Statistics (BLS), today’s ADP Report does not include the effects of federal hiring for the 2010 Census. Hiring for the census may have peaked in May. For this reason, Friday’s figure for the change in nonfarm total employment reported by the BLS might be weaker than today’s estimate for nonfarm private employment in the ADP Report.
All of this bodes terribly for tomorrow’s big jobs report, wherein the Labor Department will update the national unemployment rate. The economy needs to add 100,000 jobs to keep up with growth in the labor force, and 200,000 at least to cut into the unemployment rate. Census hiring has peaked, and most economists are predicting low numbers.