Early signs of positive jobs report to launch campaign’s last stretch
09/06/2012 4:51 PM
09/07/2012 8:34 AM
A closely watched jobs report that the federal government will release Friday will get more scrutiny than usual, as it falls on the first day of the final stretch of the presidential election and comes amid several signs that hiring may be picking up.
Economists expect the August jobs report from the Labor Department to be rosier than in past months, after several positive readings this week from other gauges of employment.
Chief among these is the ADP National Employment Report, a private measure of private-sector payrolls that tracks similarly to what comes out in the official government reports, which comprise public- and private-sector employment data. The ADP report came out Thursday, and it showed that 201,000 private non-farm jobs were created from July to August.
“Employment in the private, service-providing sector expanded 185,000 in August, up from 156,000 in July. Employment in the private, goods-producing sector added 16,000 jobs in August. Manufacturing employment rose 3,000, following an increase of 6,000 in July,” the ADP report said.
The ADP report has overstated hiring twice in the past six months, so it isn’t always an accurate gauge. It often matches trend lines in the government report.
“The gain in ADP employment in August was the strongest since March and may raise market expectations for Friday’s employment report – the current consensus forecast . . . a 138,000 increase in August,” economists at RDQ Economics in New York wrote in a note to investors.
The August ADP number is better than in past months, and if it’s mirrored in the government jobs report that could provide wind in the sails for President Barack Obama’s re-election efforts. With Obama’s scheduled closing of the Democratic National Convention late Thursday, the sprint to Nov. 6 polling officially gets under way.
Other signs also point to more robust hiring. The worker placement company Challenger, Gray & Christmas released its monthly survey on layoff activity Thursday and found that layoff numbers in August were at historical lows. The eight-month stretch so far this year has seen the lowest number of layoffs of any similar period since 2000.
“August job cuts were down 12.5 percent from a July total of 36,855, making it the third consecutive decline in monthly job cuts. Last month was 37 percent lower than August 2011, when employers announced plans to eliminate 51,114 positions from their ranks,” Challenger’s survey said.
Although layoffs have been tame this year, Challenger warned that economic turmoil in Europe might still spill over.
“The U.S. does not exist in a bubble. The ongoing crisis in Europe and weak economies around the globe will undoubtedly take a toll on the economy,” John Challenger, the company’s chief executive officer, said in the report. “There is a chance workers might be spared from a renewal of large-scale job cuts, but the situation beyond our borders certainly will not inspire companies to start adding workers en masse.”
Adding to optimism, the government reported Thursday that initial jobless claims for newly unemployed workers fell by 12,000 to 365,000 for the week that ended Sept.1. This doesn’t have much bearing on August numbers, spanning just one week of last month, but underscores the trend of modest improvement in hiring.