Private Sector Jobs Surge; Weekly Claims Post Decrease
The number of new people filing jobless claims fell more than expected over the past week while the private sector created jobs at a far faster pace than anticipated, separate reports showed Thursday.
Though still stubbornly high, weekly jobless claims dropped 11,000 to 418,000 over the past week, more than an expected 3,000 drop.
Meanwhile, the private sector added 157,000 jobs from May to June, well ahead of estimates though still not enough to make a meaningful cut into the unemployment rate, according to a report from ADP.
Services provided the biggest share of the gain, rising 130,000 in June and nearly three times faster than May, when the overall job creation total reported by ADP and Macroeconomic Advisors was 36,000. The May number was revised down 2,000.
"This month's jobs figures are a significant improvement over May's, particularly in light of last quarter's disappointing 1.9 percent GDP growth," said Gary C. Butler, Chief Executive Officer of ADP. "Given such strong employment results despite poor GDP, I am optimistic we will see improving job growth in the second half of the year."
The national unemployment rate is mired at 9.1 percent.
Though the ADP numbers have lately been ahead by about 43,000 against the government's nonfarm payroll report, the report is seen as a a trend bellwether and sometimes causes economists to adjust their estimates for the broader economy.
With the weekly claims number, distortions associated with the holiday weekend and a government shutdown in one state made it difficult to get a clear view of the labor market.
The data also has as no bearing on the government's closely watched employment for June, scheduled for release on Friday and expected to show that nonfarm payrolls increased 90,000 last month after rising only 54,000 in May.
While the improvement in claims at the start of the third quarter could be hopeful sign that conditions were now in place for the economy to regain the momentum lost in the first half, the report itself does not offer a clear read of the labor market.
A Labor Department official said given Monday's Independence Day holiday, California and Virginia had provided partial estimates. In addition, the department had to make estimates for four states and territories.
The data also included about 2,500 claims from state employees in Minnesota following the shutdown on Thursday of the state government.
It was the 13th straight week that claims have been above 400,000, a level that is usually associated with a stable labor market.
The four-week moving average of unemployment claims, a better measure of underlying trends, fell 3,000 to 424,750.
The number of people still receiving benefits under regular state programs after an initial week of aid dropped 43,000 to 3.68 million in the week ended June 25.
The number of people on emergency unemployment benefits declined 44,183 to 3.26 million in the week ended June 18, the latest week for which data is available. A total of 7.46 million people were claiming unemployment benefits during that period under all programs, down 61,327 from the prior week.