ADP Employment Numbers Weak; Only 13,000 Jobs Added
From ADP (pdf):
Nonfarm private employment increased 13,000 from May to June 2010 on a seasonally adjusted basis, according to the ADP National Employment Report®. The estimated change in employment from April to May 2010 was revised up slightly, from the previously reported increase of 55,000 to an increase of 57,000.
June’s rise in private employment was the fifth consecutive monthly gain. However, over these five months the increases have averaged a modest 34,000. Recent ADP Report data suggest that, following steady improvement through April, private employment may have decelerated heading into the summer. The slow pace of improvement from February through June is consistent with other publicly available data, including a pause in the decline of initial unemployment claims that occurred during the winter months.
Unlike the estimate of total establishment employment to be released on Friday by the Bureau of Labor Statistics (BLS), today’s ADP Report does not include the effects of federal hiring for the 2010 Census. Hiring for the census may have peaked in May. For this reason, Friday’s figure for the change in nonfarm total employment reported by the BLS might be weaker than today’s estimate for nonfarm private employment in the ADP Report.
You are unlikely to get a sustained robust recovery without more jobs than this. Longer term, consumption growth depends on income growth that comes from private sector employment. In the short-term, consumers can rely on government largesse or the accumulation of debt as asset prices increase. However, I sense that these props are fading. Unless the government begins to hire directly, it seems likely that consumer retrenchment is inevitable.