Economists find little to cheer in latest ADP jobs report
Private-sector employment growth in September again surpassed market expectations, as the national economy added 162,000 jobs, according to data released today by Roseland-based Automatic Data Processing.
But Joel Prakken, chairman of Macroeconomic Advisers LLC, which co-authors the monthly report with ADP, said the pace of national job growth leading up to the year’s end is not enough to decrease the unemployment rate, and he’s “not expecting to see robust growth in this economy anytime soon.”
“While this number is above consensus, it’s hardly a strong number, and it’s barely above the pace that would pull the national unemployment rate down,” Prakken said. “Since we’re looking ahead at a fiscal drag even if we don’t jump off the highest ledge of the fiscal cliff … there’s not going to be really any strong growth in employment and very little, if any, improvement in the unemployment rate until 2014.”
However, Prakken said it’s encouraging that companies of all sizes and every major industry sector increased payrolls in September — including manufacturing, which added 4,000 jobs, and construction, which added 10,000 jobs, recording its strongest employment growth since March.
But Joseph Seneca, an economist at the Rutgers University Bloustein School of Planning and Public Policy, said he’s skeptical of whether ADP’s positive private-sector jobs number will show up in the Bureau of Labor Statistics’ September employment data, which will be released Friday.
“The estimate by BLS right now is about 118,000 jobs for September, and this (ADP number) is showing significant job growth above that. That’s encouraging, but last month, ADP was at 201,000 jobs and the BLS payroll survey came in at 103,000 (private-sector) jobs, so there’s been a significant discrepancy,” Seneca said. “Even with the misaligned data, it’s clear the underlying economy is moving modestly forward, in terms of growth in jobs, and it’s not enough to get the unemployment rate down. I think at this stage of the economic recovery, we’ve gotten back 52 percent of the private-sector jobs we lost, and that’s pretty tepid.”
In terms of the health of New Jersey’s employment in September, Seneca said he’s “not ready to say it’s decelerating,” but noted the state “hasn’t participated in the private-sector job growth that the nation has had in the past two months.”
“The national economy gained around 260,000 total private-sector jobs in July and August, but from the state data, it looks like New Jersey didn’t get any of them,” Seneca said. “I think we’ll need to wait for the July and August revisions to come out before we can get an idea of what’s happening. Things are bouncing around too much in New Jersey to say right now.”