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Private sector adds 368,000 jobs in June: survey

July 5, 2006

NEW YORK (Reuters) – U.S. private sector employers created
an estimated 368,000 jobs in June, compared with 122,000 jobs
in the previous month, a report by a private employment service
said on Wednesday.

The monthly ADP National Employment Report is based on
payroll data and measures the change in total private sector
nonfarm employment each month.

The report is released each month, two days before the
government’s own job survey of a net gain in nonfarm jobs in
the U.S. private and public sectors.

“These findings indicate a strong acceleration of
employment in June,” said Joel Prakken, chairman of
Macroeconomic Advisers, LLC, said in a statement. Macroeconomic
Advisers developed the ADP report together with ADP Employer
Services.

He separately told Reuters that private sector jobs growth
in June was “broad-based,” averaging around 218,000 over the
last six months. “I’m pretty confident that jobs growth on
Friday would be healthy and I wouldn’t be surprised if it shows
an acceleration.”

Prakken, however said the U.S. economy’s current jobs
growth is not sustainable and, if it persisted, could increase
inflationary pressures.

He also estimated that the average public sector monthly
jobs growth was 12,000 over the past 12 months.

According to the latest Reuters poll of economists, the
U.S. Labor Department on Friday is expected to show that
155,000 nonfarm jobs were created last month, up from 75,000 in
May.

Shortly before the release of the ADP data, traders were
betting on Wednesday that U.S. employers added 148,230 jobs in
June in the first derivatives auction related to the government
payroll figures, according to data from firms conducting the
auction.

One analyst said the ADP report is not a reliable indicator
of U.S. non-farm payrolls data. “The history of this number
being a good leading indicator is shaky at best,” said Andy
Brenner, head of global fixed income at Hapoalim Securities in
New York.

Following the ADP report, research firm High Frequency
Economics in Valhalla, New York raised its U.S. non-farm
payrolls forecast to 200,000. The firm’s chief economist Ian
Shepherdson, however, noted that the ADP estimate was a bit on
the high side, “given other evidence of slowing labor demand.”

Shepherdson added that a 200,000 gain in U.S. jobs “would
not reverse the recent slowing trend.”

Automatic Data Processing, based in Roseland, New Jersey,
is the parent of ADP Employer Services and is a large payroll
services company. Macroeconomic Advisers LLC is based in St.
Louis, Missouri.

Shortly before the release of the ADP data, traders were
betting on Wednesday that U.S. employers added 148,230 jobs in
June in the first derivatives auction related to the government
payroll figures, according to data from firms conducting the
auction.

(Additional reporting by Kevin Plumberg and Richard Leong)


Source: reuters



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