ADP report shows anemic private-sector job growth

posted at 9:30 am on August 5, 2010 by Ed Morrissey

In one of the most reliable early indicators of job growth, ADP released its monthly employment report yesterday, and the news continues to disappoint.  The private sector grew by 42,000, according to the payroll giant’s estimations, which is better than June’s revised 19,000, but still far below the growth needed to keep up with population growth.  For the first time in months, the manufacturing sector lost ground:

Nonfarm private employment increased 42,000 from June to July 2010 on a seasonally adjusted basis, according to the ADP National Employment Report®. The estimated change of employment from May to June was revised up slightly, from the previously reported increase of 13,000 to an increase of 19,000.

July’s rise in private employment was the sixth consecutive monthly gain. However, over those six months increases have averaged a modest 37,000, with no evidence of acceleration. …

July’s ADP Report estimates nonfarm private employment in the service-providing sector rose by 63,000. Employment in the goods-producing sector declined 21,000 during July while employment in the manufacturing sector decreased 6,000, the first decrease in six months.

Large businesses, defined as those with 500 or more workers, saw employment remain flat and employment among medium-size businesses, defined as those with between 50 and 499 workers increased by 21,000. Employment among small-size businesses, defined as those with fewer than 50 workers, increased by 21,000 in July.

American population growth creates around 100,000 working-age adults every month, on average.  The economy has to produce at least that many jobs to keep up with the expanding numbers.  In the past three years, we have had only one month in which the private sector has managed to do that, in March of this year, when 224,000 private-sector jobs were created.

The hit on manufacturing was predictable, given the turndown seen in the last two months.  Demand has fallen and inventories have risen, which means that manufacturers have to slow down in the short term.  Construction also fell, although by the smallest amount in more than two years.  We may be reaching the bottom on construction, although the recent sharp declines in residential sales may move the bottom even lower.

Bear in mind that this data does not include the public sector.  The mass layoffs of Census Bureau temps will come out in tomorrow’s report, and that could offset the minor private-sector gains suggested by ADP’s data.  According to Briefing.com, the consensus for private-sector jobs will be between +70K – +83K, but the consensus on overall numbers will be sharply negative — between -87K and -125K.  I’d guess lower on each, perhaps +50K on the private sector and -150K overall.   In any case, the numbers will not help build confidence in the Obama administration’s approach to economics.

And as if to underscore this, initial jobless claims hit a four-month high:

In the week ending July 31, the advance figure for seasonally adjusted initial claims was 479,000, an increase of 19,000 from the previous week’s revised figure of 460,000. The 4-week moving average was 458,500, an increase of 5,250 from the previous week’s revised average of 453,250.

The advance seasonally adjusted insured unemployment rate was 3.6 percent for the week ending July 24, unchanged from the prior week’s unrevised rate of 3.6 percent.

The advance number for seasonally adjusted insured unemployment during the week ending July 24 was 4,537,000, a decrease of 34,000 from the preceding week’s revised level of 4,571,000. The 4-week moving average was 4,575,500, an increase of 25,750 from the preceding week’s revised average of 4,549,750.

The 479,000 level is the highest since April 1oth, when it hit 484,000.  It’s still within a remarkably narrow band for the entire year, showing that job destruction continues, and that means bad news for the White House in tomorrow’s report.

Update: The AP uses its favorite adverb again:

New U.S. claims for unemployment benefits unexpectedly rose last week, government data showed on Thursday, underscoring a weak labor market and the fragile economic recovery.

The Labor Department says new claims for unemployment insurance rose by 19,000 to a seasonally adjusted 479,000. Analysts had expected a small drop. Claims have risen twice in the past three weeks.


Related Posts:

Breaking on Hot Air

Blowback

Note from Hot Air management: This section is for comments from Hot Air's community of registered readers. Please don't assume that Hot Air management agrees with or otherwise endorses any particular comment just because we let it stand. A reminder: Anyone who fails to comply with our terms of use may lose their posting privilege.

Trackbacks/Pings

Trackback URL

Comments

The stimulus worked!

rob verdi on August 5, 2010 at 9:33 AM

What’s all the fuss?

Who needs a job when you don’t have to repay anything?

catmman on August 5, 2010 at 9:35 AM

Companies hire workers to increase profits, Obamcare and other policies of this admin have made it counter-productive to hire people, now companies squeeze more productivity out of workers rather then add new burdens. In other words in one year Obama managed to bring the West European model of high unemployment and a permanent underclass who are dependent on government largess to America. Of course when the money runs out we turn into Greece.

rob verdi on August 5, 2010 at 9:36 AM

RECOVERY SUMMER!

Good Lt on August 5, 2010 at 9:38 AM

As a member of the semi-employed, I always wonder where I fall. my initial unemployment claim was back in november, then i went to school from Jan-May, then got a small contract job (at half-pay) that lasts til november. Technically, i fell off unemployment in june, but when this contract expires, I go right back in. All in all, I think my story is more common than than straight ‘unemployment’ a lot of folks want to work and get better and be more – in a system that is stifling that and encouraging laziness and surrender. I wish that the numbers reportered were true unemployment – so they were comparable to Great Depression. I think it’d be fascinating to see.

WashingtonsWake on August 5, 2010 at 9:39 AM

RECOVERY—————————————–DOA!

canopfor on August 5, 2010 at 9:39 AM

It’s only unexpected to those who believe that the stimulus would actually work. Wait until the Bush tax cuts expire…

Beaglemom on August 5, 2010 at 9:43 AM

Obama: “See! Private sector jobs are growing! First you guys complain about the economy losing jobs, NOW….you’re complaining about us gaining jobs too slowly?! I can see there’s no pleasing you!”

crowd laughs and cheers.

B Man on August 5, 2010 at 9:44 AM

Garter Snake Recovery Action

http://www.recovery.org/projectdetails.aspx?pid=RFP:11323654&gloc=San Mateo [CA]*CNT:06081
====================================

Recovery Tracking-Featured Recovery Projects

http://www.recovery.org/

=============================

Recovery.Gov/Tracking the Money

http://www.recovery.gov/Pages/home.aspx

canopfor on August 5, 2010 at 9:45 AM

ADP report shows anemic private-sector job growth

But….But….But…..Timmy said:


But amid that bad news, Geithner said, were signs of growth in the private sector.

“If you look at the numbers last week that tell you what’s happening to the economy as a whole, what they showed is the private sector is getting stronger. So if you’d add together business investment and consumption, that part of the economy, which is what matters for the future, is getting progressively stronger and that’s very important,” Geithner said.

…..You going to believe me …or your lying eyes.

Baxter Greene on August 5, 2010 at 9:45 AM

July’s rise in private employment was the sixth consecutive monthly gain. However, over those six months increases have averaged a modest 37,000, with no evidence of acceleration.

And if you’ve been listening to Barry lately, he’s clinging desperately to that one stat. The consecutive months of private sector job growth. Even though it’s been anemic and has done nothing to lower unemployment or keep pace with the growth in population, he’ll keep emphasizing that streak because there’s no other positive data he can point to.

Doughboy on August 5, 2010 at 9:46 AM

What’s all the fuss?

Who needs a job when you don’t have to repay anything?

catmman on August 5, 2010 at 9:35 AM

exactly!

cmsinaz on August 5, 2010 at 9:46 AM

I need a Spanish holiday with a few friends,..just to relax a bit.

a capella on August 5, 2010 at 9:46 AM

You know, really, this report and the previous post about the possible mortgage bailing could be frighteningly related. Unemployment rising, foreclosures rising as well. This leads to property devaluation, which increases the number of necessary bailouts. The bailouts then further devalues property through inflation, the dollar, and probably slams the stockmarket all further eroding the jobs situation. I can’t help but think this is what the precipice of economic disaster looks like. Apocalypse thy name is Obama.

WashingtonsWake on August 5, 2010 at 9:47 AM

B Man on August 5, 2010 at 9:44 AM

was thinking the same thing, he and gibbsy will tout that today…

cmsinaz on August 5, 2010 at 9:47 AM

Bush had way over 40 months of positive employment growth.
Should we retake the census?

seven on August 5, 2010 at 9:47 AM

I’ve come to the conclusion that it isn’t very wise to trust the ADP numbers anymore. It may have been at one time, but a lot of companies (including the one I am working for) have left ADP and brought payroll back in-house to save money.

The company I work for has about 15,000 employees nationwide and they thought they would save money by bringing payroll back to the corporate office. I’m sure some of the larger companies are starting to realize this as well.

MobileVideoEngineer on August 5, 2010 at 9:51 AM

unexpectedly

These people must be surprised when the sun rises in the east.

novaculus on August 5, 2010 at 9:51 AM

Its the Summer of Love.. err….uuuhhh…I mean Recovery…..small flash back there…sorry…

Badbrucskie on August 5, 2010 at 9:51 AM

Bush had way over 40 months of positive employment growth.
Should we retake the census?

seven on August 5, 2010 at 9:47 AM

52 straight months if I recall correctly. Of course you’d never know that based on the way the drive-bys were selling the economy back then.

Doughboy on August 5, 2010 at 9:52 AM

Long term mediocrity and malaise tighten grip, with the probability of a vigorous recovery near zero – probability of economic disaster still pretty high.

forest on August 5, 2010 at 9:52 AM

Grateful Americans should be thanking PBHO for this period of funemployment, a time to travel the world, start new hobbies, spend time with family, train a new pet, take bike rides, sit in a darkened room sipping from a bottle of Jack Daniels while staring at a loaded revolver on the coffee table in front of you.

This should be a joyous time. Losing your job and everything you own can be fun.

Bishop on August 5, 2010 at 9:54 AM

Funemployment!

The Chewbacca Defense on August 5, 2010 at 9:59 AM

Yeah, an my dog unexpectedly started licking his nether-regions today.

Bruce MacMahon on August 5, 2010 at 9:59 AM

The only thing growing nowadays is the gubmint.

petefrt on August 5, 2010 at 10:08 AM

after searching for a job this past year and making the decision to go back to school (nothing else to do, really), I finally have a possible job offer. When I asked the guy who interviewed me how many people the facility had laid off recently, the answer was “about 100″.

So they re-hire one employee for every 100 they lay off I guess. What an eye-opener. Everyone who has a job right now is incredibly lucky. I am thinking if I get this job I will offer to pay some bills for struggling people I know…

CambellBrown on August 5, 2010 at 10:08 AM

You know what would help eliminate enemployment? The biggest tax increase evah, that’s what. And big new regulatory burdens on small businesses, those cheats, and lots of new government oversight of everybody! Big job growth there, for sure.

MTF on August 5, 2010 at 10:10 AM

I apologize for being off topic, but can someone update me as to whether or not the House inadvertently voted themselves into their healthcare bill? I’ve been unable to find any information on this topic. Thank you in advance.

Virginia Shanahan on August 5, 2010 at 10:13 AM

I am thinking if I get this job I will offer to pay some bills for struggling people I know…

CambellBrown on August 5, 2010 at 10:08 AM

That’s an awesome thing to do.

B Man on August 5, 2010 at 10:13 AM

Sort of like when a patient unexpectedly died of blood loss after repeated applications of leeches.

Lily on August 5, 2010 at 10:14 AM

You know what would help eliminate enemployment? The biggest tax increase evah, that’s what. And big new regulatory burdens on small businesses, those cheats, and lots of new government oversight of everybody! Big job growth there, for sure.

MTF on August 5, 2010 at 10:10 AM

Ha! Sounds like you were just talking to the same left wing loonies that I was talking to a few days ago.
But, they’re serious.

B Man on August 5, 2010 at 10:14 AM

Bishop,
don’t go by yourself, take someone with you. Someone important, like an actor.

Skandia Recluse on August 5, 2010 at 10:18 AM

Obama is either incompetent or allowing this to happen. His only course, in his mind, is to let the Bush tax cuts to expire, raise taxes in as many ways as possible and spend in areas that does not promote capitalistic goals. In other words, we’re forked. When history records this administration, Biden will be remembered as the smart one.

volsense on August 5, 2010 at 10:21 AM

RECOVERY SUMMER!

GarandFan on August 5, 2010 at 10:24 AM

We’re being led like we’re the Donner Party, up a mountain of moronic liberal ideas, straight into the snowbank of government strangulation of the economy.

Meanwhile, through the valley of free market ideas, we see an open road through green trees and bubbling brooks.

NoDonkey on August 5, 2010 at 10:30 AM

I need a Spanish holiday with a few friends,..just to relax a bit.
a capella on August 5, 2010 at 9:46 AM

Speaking of which, no one is making a big deal over the fact that she split for Spain and blew off Barry on his birthday. Doesn’t anyone else find this odd?

joejm65 on August 5, 2010 at 10:39 AM

“Recovery”

They keep using this word, but I do not think it means what they think it means.

“Unexpectedly”

They keep using this word, but……………aww, hell, now I’m just repeating myself.

Dominion on August 5, 2010 at 10:40 AM

Bishop,
don’t go by yourself, take someone with you. Someone important, like an actor.
Skandia Recluse on August 5, 2010 at 10:18 AM

The only place I’m going is Sturgis and the only actor I would want to take with me there would be Nick Nolte or Jessica Biehl.

Bishop on August 5, 2010 at 10:45 AM

Good grief, after a year and a half, enough with the “unexpectedly,” nonsense, already!

As if this news weren’t bad enough on top of the 22 million that Bozo is using to train programmers in asia, I sent Ed an item I found yesterday in the WSJ about GM building a brand new manufacturing plant in……..

Mexico.

Why do any of us responsible hardworking folks keep working and paying our bills? Those among us that do not, live quite well at our expense.

By the way, that very problem forced the first governor of Massachusetts to terminate the colony’s first experiment in socialism.

dogsoldier on August 5, 2010 at 10:53 AM

Don’t worry Barry’s got a plan. If you’re unemployed, Barry will pay for your health care, he’ll pay your mortgage, he’ll send you spending cash.

Now, the rest of you serfs. Get back to work!

PackerBronco on August 5, 2010 at 11:16 AM

I’ve exhauste my unemployment benefits, which is fine. It was a benefit, not an entitlement. However, like many other Americans, I need steady work so that I can plan for the future and gain ground financially. Keeping us on welfare is no way for a nation to be viable.

madmonkphotog on August 5, 2010 at 11:24 AM

The AP is full of schnapsed people. They are no less delusional on their hourly news radio updates. They report the bad news on the Obama-admin. with such fake enthusism that one could hurl on-going.

Schadenfreude on August 5, 2010 at 11:39 AM

Things like THIS are why the jobs situation is so dire!

Mutnodjmet on August 5, 2010 at 11:49 AM

Update: The AP uses its favorite adverb again:

No one expects the Great Obama Depression.

AUINSC on August 5, 2010 at 12:42 PM

Grateful Americans should be thanking PBHO for this period of funemployment..

Bishop on August 5, 2010 at 9:54 AM

Stupendous! Appropriated, with attribution, for benefit of others.

The War Planner on August 5, 2010 at 12:56 PM

Lily on August 5, 2010 at 10:14 AM

Or like a patient unexpectedly died of blood loss after failure to notice that the patient right leg was missing.

Cause of this failure to notice was due to excessive blood obscuring the view of the Government Incoming Inspector.

This caused the Government Incoming Inspector to search for possible causes of “excessive blood obscuring the view” thru the new computerized reference system.

The new computerized reference system indicated that “excessive blood” was in fact due to the patient heart beating.

The Government Incoming Inspector then order medical staff to stop the heart beating, as this was the most cost effective remedy to a patient bleeding excessively.

The Government Incoming Inspector has been promoted to Head regional Government Incoming Inspector for all Government Incoming Inspector.

DSchoen on August 5, 2010 at 2:45 PM