This week, instead of my usual economic digest, I’m going to focus on the U.S. jobs picture. After all, we’ve just received not one—but two separate market-moving reports on the labor market. To help you process these results, I’ve prepared a few charts to help you see where we’re headed in terms of jobs growth and jobless claims.
We did get a small surprise today on the jobs front with the latest payroll report from ADP, which showed that the private sector created 188,000 jobs in June. That’s up from 134,000 in May and ahead of expectations for 160,000.
This Friday, investors will be watching the Unemployment Rate report closely and viewing the latest data for clues as to when the Federal Reserve might begin to reduce its quantitative easing (QE). While ADP and the Labor Department do have slightly different numbers month-to-month, as you can see below, both reports follow the same general trend. Right now, jobs growth appears to be in recovery mode after dropping off at the beginning of 2013.
Last week, jobless claims fell 5,000 to an annual rate of 343,000. Given that economists had forecast a rate of 345,000, this was a slightly larger-than-expected drop. Meanwhile, the four-week moving average ticked down 750 to a rate of 345,500. This is also the second consecutive week that jobless claims have fallen. We’ll get a better idea of the jobs picture with this Friday’s Unemployment Rate report but at least layoff activity appears to be moderating over the long run.
That’s all I have for this week. Today was a shortened day of trading with the market closing at 1:00 p.m. EDT, followed by the holiday on Thursday. Regular trading hours resume on Friday, but unless there is major news breaking, you can expect a quiet day with low volume. I know a lot of folks are taking off Friday, so it will be a four-day weekend for many people.
Have a great Fourth of July holiday!