US private payrolls increased more than expected in June as small businesses ramped up hiring, and fewer Americans applied for unemployment benefits last week, suggesting a rebound in job growth after May’s paltry gains.
Advertisement
The ADP National Employment Report showed private employers hired 172,000 workers in June, beating market expectations for a 159,000 gain.
But goods-producing industries saw a sharp decline last month, shedding 36,000 net jobs after a decline of 5,000 in May.
“Job growth revived last month from its spring slump”, said Mark Zandi, chief economist of Moody’s Analytics. May was a prime example as ADP’s initial figure of 173,000 net new jobs was much higher than the government reported. It is expected to show job growth rebounded to 175,000 nonfarm payrolls from a paltry 38,000 in May.
The Business Activity Index increased 4.4 percentage points to 59.5 percent, reflecting growth for the 83rd consecutive month and at a faster rate in June.
This month, the construction sector shed 5,000 jobs, the first time employment in the sector went south in almost five years.
Central bank news:Minutes from the European Central Bank’s June meeting (http://www.wsj.com/articles/ecb-minutes-brexit-vote-seen-as-important-source-of-uncertainty-1467892442), showed that policy makers warned that a United Kingdom vote to leave the EU could have significant negative repercussions for eurozone growth. The Fed raised the short-term rate it controls in December after pinning it at zero for seven years. The dollar rose against the euro and trimmed losses versus the yen after the data. Prices for U.S. Treasuries were little changed.
Oil boost: Oil prices also rose, building on a gain from Wednesday, after data from American Petroleum Institute showed crude supplies fell 6.7 million barrels for the week ended July 1 (http://www.marketwatch.com/story/oil-higher-after-api-data-said-to-show-big-drop-in-us-crude-supplies-2016-07-06). That was near a 40-year low.
One of those has been initial claims for unemployment benefits.
Advertisement
The four-week moving average of new claims fell by 2,500 to 264,750, down almost 14,000 from a year ago. The reading on the labor market will be closely scrutinized for signs that weakness in May was momentary. “The wall of worry has been under full construction since the May jobs data, so tomorrow’s report will either suggest that the number was an anomaly or provide evidence of a weakening economy”. The four-week average of the so-called continuing claims rose 3,000 to 2.15 million.
