Private employers hire modestly in June
Private employers added just 13,000 jobs in June, according to a report published on Wednesday that suggested expectations of a big drop in the government's upcoming nonfarm payrolls report were on target.
The ADP Employer Services report also said May's gain was revised marginally higher to 57,000 from the original estimate of 55,000.
That revision was basically the only good news, however, in a report that under-shot expectations of a rise of 60,000 private-sector jobs in June.
It also supported fears that the short and tepid recovery from the worst recession since the 1930s was fizzling.
There is really no way to characterize this number other than disappointing, said Macroeconomic Advisers LLC chairman Joel Prakken, whose firm jointly developed the ADP report.
The overall number tells you that the recovery in the jobs market is very, very sluggish at this point.
The ADP figures come ahead of the government's much more comprehensive labor market report on Friday.
That report is expected to show a fall in nonfarm payrolls of 110,000 in June overall, as many temporary workers hired to complete the government's decennial census were let go.
It is now generally expected that the peak level of census employment was in May and that in June there will be a decline in census hiring, Prakken said.
And for that reason I think it's very likely that the number reported on Friday is going to be a negative number.
However, a gain in private payrolls of 112,000 is also expected in Friday's payrolls report, according to a Reuters poll of analysts.
If that kind of growth were maintained, it would generally be seen as an improvement.
Prakken sounded a note of caution about the future, though, citing weakening economic momentum in consumer spending, housing construction and spillover effects from a European sovereign debt crisis that has hammered global stock prices.
You have a case here I think that we need to trim our forecasts for second-half growth, said Prakken.
Slower GDP (gross domestic product) growth means slower employment, that's for sure.
Economists often refer to the ADP report to fine-tune their expectations for the payrolls numbers, though it is not always accurate in predicting the outcome.
(Editing by Padraic Cassidy)