Reports point to rosier job outlook
Private surveys say businesses added twice as many workers as predicted
WASHINGTON - June may turn out to have been a good month to find a job after all.
A private report said businesses hired twice as many workers as economists had expected. Applications for unemployment benefits have reached a seven-week low. And more small businesses say they plan to increase hiring in the next three months, a trade association said.
The brighter outlook emerged one day before the government will issue the June employment report, regarded as the most reliable gauge of job creation.
The three reports suggested that the overall economy may also be starting to strengthen now that gas prices have begun to decline and supply disruptions stemming from Japan’s crises have started to ease.
Economists responded to the latest data by raising their forecasts for hiring in June. Many now estimate that employers added at least 120,000 jobs. Some are predicting as many as 200,000 net new jobs for June.
That’s well above the consensus forecast for 90,000, based on a survey of economists by FactSet. And it could signal that weak hiring in May was a setback caused by temporary factors.
“The end of job growth may have been reported prematurely,’’ said Joel Naroff, chief economist at Naroff Economic Advisors.
The outlook brightened yesterday after payroll processor ADP said the private sector added 157,000 jobs last month. That was more than double the number economists had forecast. And it was much higher than the 36,000 jobs that ADP said employers had added in May.
Stocks rose after the report was released. The Dow Jones industrial average gained more than 118 points in afternoon trading.
Many economists said the ADP report was the reason they revised up their forecasts for the government’s jobs report to be issued today.
Nigel Gault, chief US economist at IHS Global Insight, raised his projection for net job gains in June from 100,000 to 140,000. Ian Shepherdson, chief US economist at High Frequency Economics, boosted his forecast from 100,000 to 175,000.
In May, employers added only 54,000 jobs, far fewer than the average gain of 220,000 in the previous three months. The unemployment rate rose to 9.1 percent from 9 percent in April.