Private sector payrolls better than expected

PRIVATE sector firms in the United States upped their staff counts last month and added 42,000 jobs in the July, according to a survey from payrolls processor ADP Employer Services.

This was slightly more than economists had forecast and was encouraging news only two days ahead of US non-farm payrolls. The better-than-expected jobs data buoyed global stock markets as economists expressed relief that the figure wasn’t any worse.

Paul Ashworth, senior US economist at Capital Economics, said: “The ADP survey suggests that labour market conditions remain weak but, again, at least they aren’t getting any worse.”

Ashworth added that the official figures are likely to show that private payrolls increased by 75,000 in July. However, another 150,000 census-related lay-offs last month mean that non-farm payrolls probably fell by 75,000 in total, he added.

Ian Shepherdson at HFE Economics said: “A gain is better than nothing but it is not enough to generate a sustained decline in the unemployment rate, and we don’t see this picture changing much until next year.”