This Week's Economic Roundup
Small employers continue to drive job growth across the private sector, amid signs of increased activity in both manufacturing and the service sector. Here's a look at this week's economic developments and how they may affect your business.
Job Growth Picks Up
Small businesses created 91,000 of the nation's 150,000 net new private-sector jobs in June, Automatic Data Processing, a Roseland, N.J.-based payroll firm, reported Thursday.
By contrast, larger business cut 4,000 jobs last month, the report said.
Overall, jobs across the service sector rose by 163,000, with small businesses accounting for 84,000. While manufacturing jobs fell by 13,000 -- the seventh straight month of declines -- goods-producing small businesses added 7,000.
For the three months ending in June, private-sector job growth has averaged about 103,000 per month, the report said.
"Small businesses accounted for nearly two-thirds of the increase in total employment from businesses of all sizes in June," said Joel Prakken, the chairman of Macroeconomic Advisors, an economic research group that produces the report in partnership with ADP.
The monthly report is based on payroll data from more than 350,000 employers.
A separate report on Monday by the Conference Board showed a slight decrease in online job ads in June, dropping 2 percent from May to about 4.28 million. Despite the decline, new online job ads have grown by 19 percent in the past year, the report said.
According to Monster, the New York-based online job firm, the decrease likely reflects an early start to a seasonal downturn in hire activity. Its own monthly online job index fell three points to 171, with only six out of 20 industries and six out of 23 job categories posting employment gains last month.
Service, Manufacturing Sectors Growing
Driven by sharp gains in construction, real estate, and rental agencies, growth in the service sector hit its fastest pace in more than a year last month, the Institute of Supply Management reported on Thursday.
The Tempe, Ariz.-based trade group's monthly non-manufacturing index rose 60.7 from 59.7 in May, based on a survey of supply managers. Results above 50 indicate growth.
At the same time, the pace of growth in the manufacturing sector accelerated to a 14-month high in June, the group said in a separate report on Monday.
The top performing industries in the manufacturing sector last month were petroleum and coal, chemicals, and plastics and rubber, the report said.
Factory Orders Down
Weaker demand for airplanes, construction equipment, and household appliances drove down U.S. factory orders by 0.5 percent to $416.9 billion in May, the Commerce Department reported Tuesday.
The declines, which were mostly concentrated on larger-scale durable goods, followed gains in recent months, the report said.
By contrast, demand remained strong for tobacco, leather goods, and plastics, among other non-durable goods.
Pending Home Sales Drop
The number of contracts signed for pending home sales dropped by 3.5 percent in May, driven down by tighter lending conditions and low buyer confidence, the National Association of Realtors reported on Tuesday.
Pending home sales, a forward-looking indicator of housing market activity, are now down 13.3 percent from last year, the report said.
"Some transactions are being postponed from mortgage market disruptions," Lawrence Yun, the trade group's senior economist, said in a statement. Yun said improvements in lending and consumer confidence will likely boost home sales in the months ahead.
Jobless Claims on the Rise
The number of new claims for unemployment benefits rose by 2,000 to 318,000 in the week ending June 30, the Labor Department reported Thursday.
The advance seasonally adjusted insured unemployment rate over the previous week rose 0.1 points to 2 percent, with about 2.569 million people filing claims.
The biggest increases last week were in New Jersey, Massachusetts, and Connecticut, while the biggest decreases were in Pennsylvania, North Carolina, and Wisconsin.