US job growth stays slow in May, layoffs and jobless claims rise

31 May 2012 20:52  [Source: ICIS news]

WASHINGTON (ICIS)--US job creation remained relatively slow in May, the number of layoffs increased and applications for federal unemployment benefits also rose in the month, private sector and government reports said on Thursday.

Automatic Data Processing, Inc (ADP) said on Thursday that US private sector employment rose by 133,000 workers in May from April (compared with a gain of 119,000 new workers in April) on a seasonally adjusted basis.

That was less than the 150,000 job gains that forecasters had expected, and ADP officials said the May data fuels concerns “that the economy is slowing fundamentally”.

ADP’s employment data is based on actual payrolls, which the company prepares for thousands of employers across the US.

The ADP national employment report often is seen as a harbinger of the Labor Department’s official monthly employment report. The department’s May report will be issued on Friday.

The Labor Department’s April jobs report showed employment growth of only 115,000 workers and marked the third straight month of slowing workforce gains.

The US economy should generate about 150,000 new jobs monthly just to accommodate new workers entering the employment market.

ADP president Carlos Rodriguez said that the pace of hiring in April and May has been markedly lower than the first three months of this year.

“Over the first quarter of 2012, monthly employment gains averaged just over 200,000,” he said.  “However, during the first two months of the second quarter, the average monthly employment gain slipped to 123,000.”

Joel Prakken, chairman of Macroeconomic Advisers, which assists ADP in compiling data, said that what he termed a sharp decline in job growth over the past two months “seems consistent with other incoming data suggesting the economy, weighed down by heightened uncertainty over the European financial crisis and by growing concerns about domestic fiscal policy, slowed early in the year”.

In a separate report, outplacement firm Challenger, Gray & Christmas said that US employers announced plans in May to cut nearly 62,000 workers, the highest pace of layoffs since September last year.

“The May job-cut total was up 53% from the 40,559 planned layoffs announced in April,” the firm said, and the May figures were 67% higher than the same month last year.

The highest layoffs were in the computer industry, the company said, but job cuts in the foods sector also were running high, up by 75% for the first five months of this year compared with the same period of 2011.

Challenger, Gray & Christmas said that large layoff announcements in the food industry may be on the horizon.

The US Department of Labor reported on Thursday that claims for unemployment benefits rose by 10,000 or 2.7% in the week ended 26 May to 383,000 from the April level of 373,000.

The department said that its four-week moving average of unemployment benefits applications also rose, up by 3,750 from the previous week’s measure.

Paul Hodges studies key influences shaping the chemical industry in Chemicals and the Economy

By: Joe Kamalick
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