New unemployment claims fell by 14,000 to 374,000 in the week ending June 30, falling below the 375,000 benchmark considered necessary to lower the national unemployment rate, according to data released today by the Department of Labor. Last year at this time, there were 425,640 initial claims.
Modest improvements in the job market were also reported today by ADP, a private payroll service. According to the latest ADP National Employment Report the private sector added 176,000 jobs on a seasonally adjusted basis from May to June.
The service-producing sector accounted for 160,000 of the jobs, according to the report, while the private, goods-producing section added 16,000. Manufacturers reversed May’s decline, adding 4,000, and the construction sector added 8,000, reversing two consecutive months of decline. The financial services sector added 11,000 jobs.
“In spite of lingering fiscal uncertainties, it is encouraging to see companies creating jobs,” Carlos A. Rodriguez, president and chief executive officer of ADP, said in a statement, noting that since January U.S. businesses have added an average of 173,000 jobs a month.
The ADP report may presage a favorable nonfarm payroll report from the Department of Labor tomorrow, according to Joel Prakken, chairman of Macroeconomic Advisers, LLC. “The gain in private employment is strong enough to suggest that the national unemployment rate may have declined in June,” said Prakken in a statement.
The four-week moving average for unemployment claims, reported today by the Labor Department, fell 1,500 to 385,750 from the previous week’s revised average of 387.250.
Though overall growth is slowing for the U.S. service industry, the sector is hiring at a slightly higher rate, according to the June Non-Manufacturing Business Activity Index released today by the non-profit Institute for Supply Management. The index registered 51.7 percent in June, a 3.9 percent drop from the 55.6 percent registered in May, reflecting continued, but slower growth for the 35th consecutive month.
New Orders fell 2.2 percent to 53.3 percent from May to June, but employment rose 1.5 percent to 52.3 percent, according to the institute. The non-manufacturing industries included in the index are educational services, entertainment and recreation, management of companies and support services, retail trade, transportation and warehousing, accommodation and food services, public administration, construction, information, finance and insurance, wholesale trade, mining, agriculture, forestry, fishing and hunting, heal care and social assistant, real estate, rental and leasing and professional, scientific and technical services.
Perhaps the news will encourage the nation’s young adults, who according to Millionaire Corner research, rank unemployment as one of their top two financial fears.