ADP Report Show May Private-Sector Jobs Up Only 55K
By Kathleen Madigan
Of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)--Private payroll gains strengthened in May, with very sluggish hiring among large companies, according to data released Thursday.
Private-sector jobs in the U.S. increased by 55,000 last month, according to a national employment report published by payroll giant Automatic Data Processing Inc. (ADP) and consultancy Macroeconomic Advisers.
Economists had expected ADP to report a job gain of 75,000 in May. The estimated change in employment for April was revised from an increase of 32,000 to an increase of 65,000.
The Treasury and currency markets had little reaction to the ADP report, although U.S. stock futures pared their gains a bit after the release.
The ADP survey tallies only private-sector jobs, while the Bureau of Labor Statistics' nonfarm payroll data, to be released Friday, include government workers.
The hiring of workers for the 2010 census is expected to cause a surge in hiring. Economists surveyed by Dow Jones Newswires expect the BLS will report May payrolls jumped by 515,000, following a gain of 290,000 in April. Among those economists forecasting private-sector jobs within the BLS data, the median projection is for a gain of 188,000.
Economists said the less-than-expected ADP report wouldn't change their expectations for Friday's number.
"The ADP tally has understated the BLS count in 11 of the last 12 months and 5 of the last 6, by averages of 70,000 and 90,000, respectively," said Jared Franz of T. Rowe Price after the ADP release.
With jobs growing, the May unemployment rate is projected to slip to 9.7% from 9.9% in April.
Although the ADP shows private payrolls up for four consecutive months, Joel Prakken, chairman of Macroeconomic Advisers, said the average gain of 39,000 is only "modest."
"We need job gains twice as big to say the recovery is well ensconced," Prakken said.
The latest ADP report showed large businesses with 500 employees or more added only 3,000 employees and medium-size businesses hired 39,000 workers in May. Small businesses that employ fewer than 50 workers increased payrolls by 13,000.
Service-sector jobs added 78,000 last month, while factory jobs increased by 15,000.
Construction jobs fell 41,000 in May, said ADP. Prakken said the ADP tally of construction jobs had lagged the BLS's number and was a main reason for the gap between the ADP and BLS reports.
ADP, of Roseland, N.J., says it processes payments of one in six U.S. workers, while Macroeconomic Advisers, based in St. Louis, is an economic-consulting firm.
Other job reports, released Wednesday, showed improvement in the labor markets.
The placement firm Challenger, Gray & Christmas reported company layoff announcements rose 1.3% to 38,810 jobs in May, from the four-year low of 38,326 job cuts announced in April.
TrimTabs Investment Research said its data show the U.S. economy added 475,000 in May. TrimTabs bases its employment estimates on an analysis of daily income tax deposits to the U.S. Treasury from all salaried employees.
-By Kathleen Madigan, Dow Jones Newswires; 212-416-2466; kathleen.madigan@dowjones.com |
