Private Sector Adds 42,000 Jobs in July; Layoffs Slow
The private sector created 42,000 jobs in July, helped primarily by a big surge in the service sector, a report Wednesday from ADP and Macroeconomic Advisors showed.
The ADP calculations coupled with another report showing layoff activity slowing to provide a slightly more optimistic picture of the US jobs market.
Planned layoffs rose six percent in July to 41,676, but downsizing activity stayed at its lowest level since before the 2001 recession, global consulting firm Challenger, Gray & Christmas said Wednesday. Meanwhile, private sector employment rose 42,000 in July, according to the latest ADP National Employment Report.
Job cuts remain well below the pace of last year, with the total for July about 57 percent lower than planned layoffs announced in the year-ago period.
Overall, there are 64 percent fewer job cuts announced so far this year—339,353—compared with the planned layoffs recorded in the first seven months of last year, according to Challenger, Gray & Christmas.
"It is true that job cuts have increased in each of the past three months," John A. Challenger, chief executive officer of Challenger, Gray & Christmas, said in a statement.
"However, the increases are so slight and the monthly totals so low when compared to recent years, that the trend in no way suggests a reversal of the significant slowdown in job-cut activity witnessed over the past year."
The government was the biggest sector to shed jobs for the fourth time in 2010. It announced plans to lay off 7,193 workers last month, 36 percent higher than in June.
"This sector has the biggest potential for additional job-cut spikes between now and the end of the year," John Challenger said.
The government and non-profit sector plans to eliminate 105,969 jobs this year. The second-biggest job-cutting sector is the pharmaceutical industry, with 37,010 cut planned, 30 percent lower than in the first seven months of 2009.
US Private Sector Adds 42,000 Jobs in July
U.S. private employers added 42,000 jobs in July, compared to a revised gain of 19,000 in June, a report by a payrolls processor showed on Wednesday.
The June figure was originally reported as a gain of 13,000.
The median of estimates from 33 economists surveyed by Reuters for the ADP Employer Services report, jointly developed with Macroeconomic Advisers, was for a rise of 40,000 private-sector jobs in July.
The ADP figures come ahead of the government's much more comprehensive labor market report on Friday, which includes both public and private sector employment.
That report is expected to show a fall in overall nonfarm payrolls of 65,000 in July, based on a Reuters poll of analysts, but a rise in private payrolls of 90,000.
Economists often refer to the ADP report to fine-tune their expectations for the payrolls numbers, though it is not always accurate in predicting the outcome.
"Today's ADP National Employment Report shows continued weakness in the jobs market, which is in part caused by the uncertainty in the economy and general business climate," said Gary Butler, CEO of ADP, in a prepared statement.
"American businesses are on the cusp of recovery, but more effective incentives are needed to encourage business investment resulting in the creation of more jobs," he added.
—Reuters contributed to this story.
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