Many were disappointed with the jobs report released by the United States Department of Labor for the month of June, because the unemployment rate remained at 8.2%. The 80,000 jobs created were short of the 90,000 jobs expected by analysts.
Despite the moderate jobs growth, we noticed positive signs during the first week of July. American companies were expanding their businesses and creating hundreds of jobs, some companies made even thousands of jobs across the country, particularly in big cities. Some of the companies that were actually hiring in July were Union Pacific Corporation (NYSE:UNP) 4,500 new jobs, Universal Health Services (NYSE:UHS) 1,400 new health care jobs, and Firehouse Subs required additional 1,500 workers.
A latest report from Bloomberg cited data released by ADP Employer Services, indicating that companies in the United States added 163,000 jobs in July based on payrolls. An indication that the economy is gaining momentum and there is a possibility for the unemployment rate to go down. If the ADP’s data is correct, consumer confidence will become stronger, spending will increase and the economy will be revitalize.
Based on the ADP data, companies with 499 employees added 23,000 jobs; medium-sized businesses hired 67,000 new workers, while small businesses created additional 73,000 jobs.
On the other hand, Bloomberg said the result of its survey on 38 economists showed that their median estimate was 120,000 jobs created for the month of July.
The general expectation of analysts is the Department of Labor will report a total of 100,000 jobs created for July, including jobs created by the government. The agency will release its official report on August 3. The unemployment rate has been raised to more than 8 percent for the past 41 months.
How accurate is the ADP estimate? Compared with the results released by the Department of Labor, ADP’s initial estimates were either lower, or more than 72,000 on average since 2010.
Bloomberg’s surveys missed by 58,000 on average, based on the median forecasts of economists.
Joel Prakken, Chairman of Macroeconomic Advisors LLC told CNBC the report showed that the employment growth is okay, but the economic recovery is not fast enough. He said, “The labor market is recovering only slowly. The economy is growing lethargically.”
ADP partnered with Macroeconomic Advisers LLC in producing the data, which was collected from companies with more than 21 million employees on payroll
The report “shows OK employment growth, but not fast enough to dig us out of the hole we’re in,” Joel Prakken, chairman of Macroeconomic Advisors LLC, which produces the data with ADP, said in an interview on CNBC television. “
James Knightley, senior economist from ING Bank NV in London, said the report is encouraging as it indicates signs of growth and companies are looking to hire although the jobs growth is not rapid to decrease the unemployment rate significantly.
Slow but sure economic growth is better than having a rapid, but artificial growth.