WASHINGTON (MarketWatch) — U.S. companies hired 55,000 additional workers in May, the fourth straight monthly increase in private-sector jobs, payroll giant ADP said Thursday.
“The economy has finally eased out of the jobless stage of the recovery,” wrote Ward McCarthy, chief financial economist for Jefferies & Co.
The ADP report is “indicative of a grudging healing process in the labor market as companies continue to use cost-cutting as a key part of their business plans,” wrote Josh Shapiro, chief economist for MFR Inc.
Economists surveyed by MarketWatch had been expecting the ADP report to show 110,000 jobs were added in May.
ADP’s net job growth for April was revised higher, up to 65,000 from the 32,000 originally reported.
Keenly followed by financial markets, the report comes one day before the government releases its monthly estimates of nonfarm payrolls and the unemployment rate.
The MarketWatch consensus looks for a nonfarm gain of 513,000 in May, including about 400,000 workers hired temporarily to conduct the 2010 Census. The unemployment rate is expected to tick down to 9.8% from April’s 9.9%.
The ADP report does not cover government workers. Over the past six months, total government employment has fallen by an average of about 15,000 per month, as state and local agencies shed workers to address severe budget shortfalls brought about by the nation’s deep recession.
Service-producing industries added 78,000 jobs in May, the fifth straight increase, ADP said.
However, goods-producing industries shed 23,000 jobs, despite a gain of 15,000 in manufacturing. Construction companies cut 41,000 jobs — the 35th straight decline for this sector.
“For the time being, it appears safe to argue that the ADP reading is undershooting the improvement in the broader payroll figure,” wrote Dan Greenhaus, chief economist for Miller Tabak & Co., referring to the estimate compiled by the government’s Bureau of Labor Statistics.
Over the past four months, private-sector job growth has averaged 39,000 per month in the ADP report, compared with about 120,000 in the Bureau of Labor Statistics’ estimates from a survey of business establishments. And a separate survey of households shows job growth has averaged 415,000 a month over the first four months of the year.
In a separate report Thursday, the Labor Department said productivity of U.S. workplaces increased at a 2.8% annual rate in the first quarter, down from the 3.6% growth rate originally estimated. Unit labor costs fell 1.3%.
Also, the Labor Department said initial jobless claims fell by 10,000 to 453,000 last week.
The ADP index is computed by Macroeconomic Advisers using anonymous payroll data collected by ADP. Automatic Data Processing Inc. (ADP 42.00, +0.53, +1.28%) provides payroll and human-resources services to about one in every six U.S. workers, serving more than 500 companies.
http://www.marketwatch.com/story/private-sector-adds-55000-jobs-in-may-adp-says-2010-06-03