Job Creation Statistics, July 2012

TRADEX GLOBAL INTERNAL COMMENTARY

The private sector added 163,000 jobs last month, above consensus expectations which was 120k.  This gain was primarily concentrated in service providing firms, and pretty evenly distributed over small and medium sized firms, with large firms showing a smaller increase.  Remember that ADP is extremely volatile and has not been an accurate predictor of the BLS number on a week-to-week basis.  Friday’s BLS Employment number is expected to be 110k, which would be a positive sign, but not enough to bring down the unemployment rate in any meaningful way.  All eyes were on the Fed today, which gave stronger signals of coming action without actually doing anything… – Richard Travia

EXTERNAL RESEARCH COMMENTARY

Companies in the U.S. added more workers than projected in July, indicating the job market was holding up entering the second half of the year, a private report based on payrolls showed. The 163,000 increase in employment followed a revised 172,000 gain the prior month, Roseland, New Jersey-based ADP Employer Services said today. The median estimate of 38 economists surveyed by Bloomberg News called for an advance of 120,000. A pickup in hiring is needed to generate the wage gains that would spur consumer spending, which accounts for about 70 percent of the world’s largest economy. A Labor Department report due in two days may show private payrolls rose by 110,000 in July, and unemployment held at 8.2 percent, according to the median projection in a Bloomberg survey. “It’s an encouraging sign that suggests there is growth and companies are looking to hire,” said James Knightley, a senior economist at ING Bank NV in London, who had projected a gain of 150,000. “Job growth is still not rapid enough to bring down the unemployment rate significantly.” Estimates in the Bloomberg survey ranged from 75,000 to 180,000. Stock-index futures rose as investors awaited the outcome of the Federal Reserve’s meeting for clues on more stimulus measures to support the economy. The contract on the Standard & Poor’s 500 Index expiring in September climbed 0.4 percent to 1,380.5 at 9:10 a.m. in New York. Another report today showed a measure of U.S. manufacturing decreased in July to 51.4 from 52.5 a month earlier, according to London-based Markit Economics.

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