As the economy continues to stutter through a fragile recovery, all eyes are once again on the Bureau of Labor Statistics, set to release its monthly jobs figures on Friday. As an appetizer, the private Automatic Data Processing jobs estimate offers some encouraging numbers — or at least not discouraging.
In the report released Wednesday, ADP projected 188,000 new jobs created in June, more than the 134,000 from its May estimate.
Moody's Analytics Chief Economist Mark Zandi said in a statement that "the job market continues to gracefully navigate through the strongly blowing fiscal headwinds," NPR reported, a reference to the automatic budget cuts that took place earlier this year, creating fears that the economy would tank.
A note of skepticism was sounded in some corners about the ADP report, which historically has been more optimistic than the BLS numbers.
Forbes' Steve Schaefer said the ADP report "exceeded the consensus view" and called it "something of a cloudy crystal ball for Friday’s non-farm payrolls report from the Labor Department’s Bureau of Labor Statistics." Schaefer said that the ADP figures have been more accurate in recent months, but "the reading’s predictive power is still minimal."
"Generally, the ADP report overshoots the BLS figures, although they actually underestimated job creation last month," wrote Ed Morrisey at Hot Air. "Even the full 188K is only a mediocre figure, barely over the 150K needed to meet population growth. If the BLS number comes in on Friday at 80 percent of ADP, that would be exactly 150K — the equivalent of treading water. Neither figure would demonstrate that we have anywhere near the kind of job creation needed to get the millions who have fallen out of the workforce back into jobs."
The jobs situation has implications for interest rates, as the Federal Reserve Board is closely watching economic improvement to begin tapering down its bond-buying program.
"Fed officials have tied any discussion about their bond-buying program to substantial improvement in the labor markets," noted a Wall Street Journal report, "making Friday’s Labor Department report on June employment numbers a key indicator. Economists are forecasting that payrolls will rise by 165,000 and the unemployment rate will edge down to 7.5 percent from May’s 7.6 percent. That report counts both private and government payroll slots."
Eric Schulzke writes on national politics for the Deseret News. He can be contacted at [email protected].