New Data Shows Promising Signs For the Job Market
Despite a slew of harrowing reports on the global and U.S. economies in recent weeks, job market gains are exceeding economists' projections.
The private sector added 176,000 jobs from May to June, payroll services company ADP announced on Thursday. A majority of those jobs (93,000) were added by businesses with fewer than 50 employees, ADP's operational definition for a small business.
Employment gains for June were much higher than expected, as economists surveyed by Dow Jones News Wires anticipated a 108,000 increase in jobs for June.
"The gain in private employment is strong enough to suggest that the national unemployment rate may have declined in June," Joel Prakken, chairman of Macroeconomic Advisers, a partner in the report, said in a statement to the press.
The goods-producing sector accounted for 16,000 of the new jobs after experiencing a net job loss for the past two months. On average, businesses have added 173,000 jobs per month this year, according to ADP.
Sam Zippin, analyst at financial data company Sageworks, told Inc. she attributes the job growth to increases in private company sales and higher net profits. Private company sales growth has been 8.8% thus far in 2012, but in June, it grew by 10% from the previous year.
In other promising labor news, the number of initial jobless claims filed for the week ending on June 30th was 374,000, a 14,000 decrease from the previous week, the Department of Labor announced on Thursday. The four-week moving average for initial unemployment benefit claims also fell, dropping 1,500.
The sharp fall in jobless claims also outperformed economists' expectations. Economists surveyed by Bloomberg News predicted there to be 385,000 initial claims, 11,000 more claims than were actually filed.
Economists are unsure if these positive indicators will result in a strong jobs report to be released by the Bureau of Labor Statistics on Friday.
"We are expecting the unemployment rate to be about the same," Zippin said. "But it will be good to see even incremental changes in unemployment, even if it goes down by 0.1%."