ADP Reports a Banner Month for Jobs But BLS Report Disappoints
September 7, 2012 8:29 am
Today is “Freaky Friday” — the day the Bureau of Labor Statistics releases their report on the previous month’s jobs statistics. Economists expect the report to indicate that about 125,000 non-farm positions have been added to the economy.
But yesterday, Automatic Data Processing (ADP) released a report that seemed to indicate that private firms are hiring at a prodigious rate. The ADP report said that 201,000 jobs were added in August, sparking a stock market rally and increasing anticipation for today’s BLS report.
It may be too early to get excited. ADP’s numbers have overshot the government statistics in three of the last five months by an average of 77,000 jobs. Most economists did not alter their expectations in light of the ADP data. Millan Mulraine, a strategist at TD Securities spoke about the ADP report to the Wall Street Journal:
While we are encouraged by the tone of this report, we will caution about reading too much into this positive surprise. We see no reason for changing our current payrolls forecast for a far more modest print of 105,000 jobs, though we are mindful of the upside risks to our forecasts.
That said, ADP reported across-the-board gains. From Bloomberg:
Goods-producing industries, which include manufacturers and construction companies, increased payrolls by 16,000, today’s figures showed. Employment in construction rose 10,000, while factories added 3,000 jobs.
Service providers took on 185,000 workers, up from 156,000 a month earlier.
Companies employing more than 499 workers added 16,000 jobs. Medium-sized businesses, with 50 to 499 employees, added 86,000 and small companies increased payrolls by 99,000, ADP said.
ADP’s positive outlook was joined by a report from the Department of Labor indicating that first-time jobless claims dropped to 365,000 — a drop of 12,000 from the previous week — and down from 411,000 in the same week the previous year.
Today’s BLS report will confirm or deny August as a banner month for job creation, and the results will no doubt immediately be used as political currency in the engulfing election wave. The real gain will be a better outlook for the nation’s 12.8 million unemployed.
UPDATE: The other shoe dropped. The Bureau of Labor Statistics reported only 96,000 jobs were added to the economy in August – well short of the projected 125,000. June and July’s numbers were also adjusted downward. Unemployment fell to 8.1 percent (from a previous rate of 8.3 percent), but the slight drop is due to job seekers giving up.
The Daily Beast‘s Daniel Gross reports on the few bright spots in the report:
The good news? The economy did add jobs in August, tacking on 96,000 new positions from July. Compared with a year ago, there are two million more Americans with private-sector payroll jobs. Strength was seen in professional and technical services (27,000 new jobs), health care (17,000 new jobs), and finance and insurance ( 11,000 new jobs), and food services and drinking establishments (27,000 new jobs). Translation: steadily rising consumer and business demand for goods and services is pushing some companies to hire.
Image from here