Positive US jobs figures marred by slowdown in services growth

Julian Harris
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STRONG jobs data provided a boost for the US yesterday, although separate economic figures suggested that the recovery remains bumpy.

The American private sector created 176,000 jobs in June, the ADP national employment report said, comfortably beating economists’ forecasts.

In May US companies also added 136,000 jobs – a figure that was revised slightly upwards, from a previous estimate of 133,000.

And the number of Americans filing new claims for unemployment benefits last week fell by the most in two months, separate figures also showed.

Initial claims for unemployment benefits dropped 14,000 to a seasonally adjusted 374,000, the Labor Department said.

However, growth in the crucial services industry slowed to its lowest level since January 2010, according to widely-regarded data from the Institute for Supply Management (ISM).

ISM’s services index dipped to 52.1 from 53.7 in May, disappointing economists. Furthermore, the details revealed a worrying slowdown in the growth of new orders.

Meanwhile, applications for US home mortgages tumbled for the second week in a row, the Mortgage Bankers Association said.

The MBA said its seasonally adjusted index of mortgage application activity, which includes both refinancing and home purchase demand, fell 6.7 per cent in the week ended 29 June.

Its index of refinancing applications slumped 8.4 per cent, after a more than eight per cent drop the previous week. The gauge of loan requests for home purchases improved modestly, up 0.6 per cent.