Two relatively optimistic reports have come out this morning, ahead of tomorrow's official government jobs report from the Labor Department. The ADP National Employment Report shows that the economy added 176,000 new private-sector jobs in June — 93,000 by small businesses.
You have to be careful with the ADP report, however. It can deviate significantly from the government's numbers. Last month, ADP said the economy had added 133,000 jobs in May, while the Bureau of Labor Statistics (BLS) concluded that we added only 69,000.
Bloomberg surveys economist each month to develop a consensus on the jobs situation and this time around, the number is around 100,000 new jobs — lower than ADP by a good margin and well below the 150,000 that was anticipated for May.
Finally, Challenger, Gray & Christmas, a human-resources consulting firm that tracks hiring and layoffs, announced that employers are slowing their pace of layoffs to a 13-month low of 37,551.
This all adds up to the possibility that the June jobs report from the BLS could be an improvement on May, getting us back on track for the kind of recovery that you'd expect with GDP growth hanging out between 2 and 3 percent (the U.S. economy only managed to grow at 1.9 percent in the first quarter). Some sectors of the economy —especially the auto industry, which saw good sales in June — are performing quite well, and on the whole the private sector has continued to add jobs, just not at the pace anyone would like to see (the public sector, meanwhile, is shedding jobs).
These early reports suggest that the dip we witnessed on the jobs front over the past few months is over and that we may return to a 200,000-per-month pace soon. That's what we were seeing in the first quarter. A 200,000 pace isn't what the economy needs right now; economists want to see 300-400,000 new jobs added each month to signal that the recovery is gaining enough strength to drive down the national unemployment rate of 8.2 percent. But it's better than the alternative: more months like May.
In California and Los Angeles, our unemployment rate is much higher, at 10.8 percent and 10.6 percent respectively, according to the BLS. We've been adding private-sector jobs at a decent clip, but we were hit so hard by the downturn that we have a deeper hole to climb out of.