Some 32,000 private jobs were added in April, according to the latest ADP National Employment Report, slightly exceeding what economists forecasted but still a very modest showing. Sounds like good news, especially since employment in the private sector has increased for three straight months adding 19,000 in March and 3,000 in February. But the numbers are a drop in the unemployment bucket.
“This is pretty punk,” said Chad Stone, economist at the Center on Budget and Policy Priorities, a Washington, D.C., think tank. “If that’s all the jobs that are created in the private sector that is too slow. You have to pick up that pace a whole lot to start to make a dent in the unemployment rate.” In order to simply hold the unemployment rate constant—which has been hovering around 9.7 percent —Stone says that 125,000 jobs need to be added each month. To put a significant dent in the unemployment rate, 200,000 to 300,000 jobs need to be created each month over a sustained period of time to help offset the 8 million job losses resulting from the recession.
The Obama Administration has projected an average monthly increase of 95,000 jobs throughout calendar 2010. But the administration’s projections are below private Blue Chip forecasts according to The White House Council of Economic Advisers. “In December, unless things change dramatically from the way it is looking now, the unemployment rate is not going to be down very much from where it is,” Stone said.
The ADP report focuses solely on the private sector and does not include government hiring which has boosted most of the job gains over the past few months. We’ll know more on Friday when the Bureau of Labor Statistics (BLS) releases its report.
Economists are predicting that the BLS report will show 175,000 to 200,000 new jobs added in the month of April reflecting temporary hiring to conduct the Census. Economists have had a tough time interpreting employment data over the past few months for a variety of reasons including snow storm-related distortions and Census hiring by the federal government. About 30 percent of last month’s 162,000 jobs were temporary Census jobs.
While the pace of economic growth is positive, employers are trying squeeze more out of their existing labor force rather than add more people, Stone said.
