Euphoria to despair–weak nonfarm payroll growth throws cold water on ADP report

OK.  That might be a bit of hyperbole on my part, but yesterday’s release by ADP showing a 157,000 jump in private-sector payrolls created a fertile climate for bullish sentiment on the Street.

But today’s report by the BLS that the economy added just 18,000 jobs in June, with 57,000 coming from the private sector, suggests the slowdown in the economy continues to severely hamper job creation.  And the reaction on Wall Street has been swift, with stocks taking a tumble, as investors run to Treasuries.

Details and a more formal look are available at Examiner.



Last week I suggested that forecasts calling for a roughly 100,000 rise in nonfarm payrolls may have been a bit too optimistic.

Weekly jobless claims have been holding in an elevated range, and there have been few signs that the economy was set to emerge from its recent soft patch.

Further, businesses have clamped down on hiring amid the slowdown and will likely keep a cautious eye on their markets before bulking up on staff.



Consequently, the nonfarm payroll numbers provided by the government more accurately reflect the recent economic slowdown in my view.

And we are unlikely to see a much-needed acceleration in hiring any time soon.