Job market perks up in last month
POSTED: Friday, July 6, 2012 - 4:30am
UPDATED: Friday, July 6, 2012 - 4:44am
NEW YORK (CNNMoney) — The job market may have perked up last month, according to three reports released Thursday.
Fewer companies announced plans to lay off workers and private businesses said they're hiring more people in June. Meanwhile, claims for unemployment benefits fell during the last week of the month.
About 374,000 people filed for first-time unemployment benefits last week, 14,000 fewer than the week before, the Labor Department reported.
Initial claims had been on an upward trend earlier in the month, so the news was seen as an encouraging sign that layoffs may be slowing.
That message was also reinforced by another report that showed companies announced fewer layoffs in June, according to data collected by Challenger, Gray & Christmas, Inc. Employers announced 37,551 planned job cuts, the lowest number in 13 months, the report said.
And separately, a report released by payroll-processing company ADP beat expectations and showed that private businesses added 176,000 jobs in June, a significant improvement over the month before.
Small businesses continued to drive job growth, with companies employing fewer than 50 employees hiring 93,000 people.
The ADP report often sets the tone for the Labor Department's jobs report due Friday. But the two reports don't always match up, so ADP isn't always a good predictor of what's to come.
The government's official report has shown hiring peaked in the winter and then slowed in the spring -- a phenomenon many economists attribute to warmer weather early in the year.
But now that the weather effect has subsided, economists are still not entirely optimistic that hiring has rebounded to levels strong enough to bring the unemployment rate down.
Economists surveyed by CNNMoney expect the monthly report to show the economy added 80,000 jobs, after factoring in some government layoffs.
That would be a slight improvement compared to 69,000 jobs added in May, but is unlikely to make the unemployment rate budge from its current 8.2%.
"What's suppressing payroll growth in recent months is what we've seen in previous years," said Michael Gapen, senior U.S. economist with Barclays. "We tend to get a spike in uncertainty from events in Europe and some domestic political concerns in the U.S."
"When we get an increase in general uncertainty, employers tend to postpone investment and hiring decisions," he added.
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