While ADP numbers often vary considerably from those announced by the federal government each month, the numbers of both tend to move in the same direction. That could mean that the official report on job growth released Friday by Bureau of Labor Statistics will also be better than expected. The consensus forecasts that the number of jobs in the BLS report will be 120,000, well below last month's 163,000.
In addition to the news from ADP, planned layoffs dropped to their lowest level in 20 months in August. And first-time claims for unemployment benefits also fell. ADP reported:
Employment in the private, service-providing sector expanded 185,000 in August, up from 156,000 in July. Employment in the private, goods-producing sector added 16,000 jobs in August. Manufacturing employment rose 3,000, following an increase of 6,000 in July. [...]Joel Prakken, chairman of Macroeconomic Advisers, LLC, which handles the jobs report for ADP said: “The August increase of 201,000, following a solid gain in July, supports the notion that the underlying trend in hiring has picked back up after slowing sharply during the spring. [...] The gain in private employment in August is strong enough to suggest that the national unemployment rate may have declined. Today’s estimate, if matched by a similar reading on employment from the BLS on Friday, will alleviate concerns that the economy has slipped into a downturn.”
Construction employment rose for the third consecutive month, adding 10,000 jobs, marking the best reading since March.
Meanwhile, the Department of Labor reported that seasonally adjusted first-time claims for unemployment benefits fell to 365,000 from last week's revised number of 377,000 (originally reported at 374,000). It was the lowest of claims reported in the past month. In the comparable week in 2011, there were 411,000 new claims.
The four-week running average that analysts prefer because it flattens volatility in the weekly numbers rose slightly to 371,250.
For all programs, state and federal, the total number of people claiming benefits for the week ending August 18 was 5,467,752, down 63,076 from the previous week. In the comparable week for 2011, there were 7,167,416 persons claiming benefits in all programs. That significant improvement has one catch: Not all those no longer making benefit claims have found a job, they've just exhausted their benefits.