Private-sector payrolls rose by a net 93,000 last month, according to this morning’s release of the ADP National Employment Report. That’s the 10th straight month of increases and the largest monthly rise in three years for this series. The news comes just in time to temper the sour trend in yesterday’s update on housing prices for the third quarter.
ADP labels last month’s gain as an “acceleration” in the labor market, which “suggests the nation’s employment situation is brightening somewhat.” That’s welcome news, of course, but even an optimistic spin can’t change the fact that job growth is still sluggish. As ADP explains in the accompanying press release:
Employment gains of this magnitude are not sufficient to lower the unemployment rate, which likely will remain above 9% for all of 2011. Furthermore, given modest GDP growth in the second and third quarters, and the usual lag of employment behind GDP, it would not be surprising to see several more months of only moderate gains in employment even as the economic recovery gathers momentum.
The next installment on reading the labor market arrives tomorrow, with the release of initial jobless claims for last week. The stakes are fairly high for the next data point, considering last week’s news that new unemployment applications dropped to 407,000 for the week through November 20—the lowest since July 2008. Is that the long-awaited sign that new jobless claims are finally poised to trend lower after a year of moving sideways?
Economists aren’t expecting a big change in tomorrow’s jobless claims from the week before. In fact, the consensus forecast is 422,000, or a slight rise from the previous week, according to Briefing.com. But that would be good news if only because it suggests that the lower levels of new filings are holding, and that last week’s report wasn’t a fluke.
But even if tomorrow’s news is good, there’s no quick fix in sight. “We’re not growing fast enough to materially reduce the unemployment rate,” Fed chairman Ben Bernanke reminded yesterday in a speech. At least there’s one opinion from the central bank that’s not controversial.