ADP reported that
private-sector employment fell by 39,000 in September, the weakest reading since January and below most forecasts.
Clearly the drop in private sector jobs is disappointing but talk in some corners of the media that the decline may lead to falling retail sales and the onset of a new recession are premature, in my view.
Most of the economic data is pointing to a continuation of slow economic growth and not a new slump. Moreover, the ADP private sector employment report has lagged nonfarm payrolls in recent months, suggesting that the labor market may a little less gloomy than today’s number indicates.
ADP noted that the private sector has generated an average of just 34,000 new jobs each month between February and August, well below the monthly average of 107,000 private sector jobs in the nonfarm payroll survey.
Still, most economists believe the economy must generate about 150,000 jobs each month just to keep up with population growth and prevent the unemployment rate from rising.
Since the recovery officially began in June 2009, the economy has come up well short of 150,000.
Nonetheless, if the trend in private sector nonfarm payrolls continues, we are likely to see the eight month winning streak extended to nine , though gains may come up shy of the recent average.
Although we’ll have to wait until Friday before we get a more complete view of what happened last month, what does seem clear is that the summer slowdown is manifesting itself in slower job growth.
And that’s not what job seekers want to hear.
