05 July 2012 17:10 [Source: ICIS news]
Payroll processing firm ADP said some 160,000 new hires in the services industries accounted for most of the 176,000 worker additions in June, although there were marginal gains in the labour forces in goods-production, manufacturing and even construction.
The total 176,000 job additions is comfortably above the 150,000 monthly job gains that economists say are needed just to accommodate young people who are entering the workforce.
But the pace of hiring would have to be in the 300,000 range monthly to make any serious inroads in reducing the 8.2% US unemployment rate and returning the approximately 23m unemployed or underemployed Americans to jobs.
In addition to the new hiring reported by ADP, outplacement firm Challenger, Gray & Christmas said on Thursday that US employers cut some 37,551 jobs in June, a decline of 39% from the nearly 62,000 redundancies seen in May.
Those data were reflected in the US Labor Department’s report that first-time claims for unemployment insurance last week were 374,000, down by 14,000 from the previous week.
The department’s four-week moving average of unemployment benefit seekers also fell, although by a more marginal 1,500 applications, compared with the previous four-week average of 387,250.
The new hiring and the declines in layoffs and the number of jobless workers seeking unemployment benefits are positive signs on the day ahead of the Labor Department’s announcement on the national employment picture for June.
That report, to be issued on Friday, 6 July, is crucial because if it follows the May jobs report, in which employment growth fell to only 69,000, causing the unemployment rate to inch up to 8.2% from April’s 8.1% reading.
A second month of unemployment gains would be seen as a serious sign for the already wobbly
Although Thursday’s employment data reports were generally positive, the Challenger firm also noted that the number of layoffs in the first six months of this year, 283,091, was 15% higher than the first half of 2011.
And while the number of job cuts in June were at a 13-month low, Challenger said layoffs in the three-month second quarter period of April through June were 22% higher than the same period of 2011, suggesting that June’s low figure does not necessarily signal a turnaround.
Paul Hodges studies key influences shaping the chemical industry in Chemicals and the Economy
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