Initial claims for jobless benefits dropped by 10,000 last week. The ADP National Employment Report said nonfarm private employment increased 55,000 in May. The report also upped the April numbers from the initial 32,000 jobs added to 65,000. The Monster Employment Index rose — only by a point — but it did rise. And the U.S. Census Bureau said new orders for manufactured goods rose again in April.
Heartening, if not full-speed-ahead news? That would seem a reasonable conclusion, except on Wall Street where traders behaved as if the news should have been better. On the initial enthusiasm, the Dow rose quickly, only to give back all the early gains and drop 57 points by lunchtime.
Nevertheless, tomorrow’s jobs numbers from the U.S. Bureau of Labor Statistics is the most anticipated of the monthly labor reports. Economists expect the report will show somewhere around 513,000 jobs were added in May. Most of the jobs — somewhat more than 300,000 is the estimate — are likely to be temporary workers hired by the Census Bureau.
Dow Jones Newswires says its poll of economists puts the average of their estimates of new, private sector, nonfarm jobs in May at 188,000. Other estimates for the overall number of new jobs range from 225,000 to 635,000.
The ADP report said small and medium sized businesses in the service sector did most of the new hiring last month. The sector added 78,000 jobs overall; large firms, those with more than 500 employees, accounted for only 4,000 of the positions.
The goods-producing sector lost 23,000 jobs overall; employers with less than 50 workers shed 24,000 positions.
One other report, actually a revision of a previous report, was released this morning that points to potential future hiring. The BLS revised its Productivity and Costs report to say that productivity increased in the first quarter of the year by 2.8 percent, rather than the preliminary estimate of 3.6 percent.
Productivity has been rising significantly throughout 2009, which, in the fourth quarter alone, saw productivity increase by 6.3 percent.
The drop in quarterly productivity may be a sign that employers won’t be able to count on increasing per worker output much and may need to hire to fill orders and serve customers.
“When the recovery first started, businesses could get more out of their existing workforces, but that’s becoming more and more difficult,” Gus Faucher, director of macroeconomics for Moody’s Analytics told Reuters.
“We are starting to see employment pick up, so we expect to see productivity growth weaken and job growth pick up as a result.”