Major indexes are up after the government said private employers increased their hiring last month, but not quite as fast as expected. The Dow Jones industrial average rose nearly 30 points.
The Labor Department said private employers added 83,000 jobs last month. That’s less than the 112,000 economists had forecast private employers would add, but more than double the 33,000 hired in May. On Wednesday, payroll company ADP’s monthly report on private employment also fell short of expectations, helping to send stocks lower.
Investors have focused on private employment in recent months because headline numbers have been skewed by the hiring and firing of temporary census workers. Also, private workers account for the bulk of the country’s labor force.
The government cut 225,000 census jobs in June. Overall, 125,000 workers lost their jobs last month, worse than the 110,000 forecast by economists polled by Thomson Reuters.
Traders have been concerned in recent weeks that the pace of the economic recovery is not as quick as they had hoped. That’s primarily because of the weak labor market. High unemployment has kept consumers’ confidence low and retail sales from growing rapidly. Consumer spending accounts for the largest portion of the nation’s economic activity. Until employers accelerate the pace of hiring, the economy is expected to grow only modestly.
John Silvia, chief economist at Wells Fargo Securities, said that while the report indicates the economy might not be robust, it is still improving. He noted hiring in the private sector was small, but diverse across many industries from manufacturing to health care.
“It says to me you have economic growth,” Silvia said. “It’s sustained.”
The unemployment rate did fall unexpectedly, dropping to 9.5 percent. Economists polled by Thomson Reuters had forecast it to rise to 9.8 percent. The unemployment rate is calculated from different statistics than the net job cuts, which is why the unemployment rate can fall even if more people lose jobs in a month.
In early morning trading, the Dow rose 29.64, or 0.3 percent, to 9,761.26. The standard & Poor’s 500 index rose 5.07, or 0.5 percent, to 1,032.44, while the Nasdaq composite index rose 8.13, or 0.4 percent, to 2,109.49.
- Associated Press