Last Thursday, the closely watched ADP National Employment Report showed that the U.S. labor market added 157,000 new jobs in May - this beat estimates of about 70,000. On Friday, the U.S. Bureau of Labor Statistics reported that only 18,000 new jobs were added - the lowest increase in nine months. Responding to the poor results, President Barack Obama renewed his focus on investing in roads, bridges and railways and commented, “Right now, there are over a million construction workers out of work after the housing boom went bust, just as a lot of America needs rebuilding”.
MY TAKE: While many economists and investors were caught off guard by the difference in the two reports, it is important to understand that the ADP report surveys the private sector (about 340,000 companies), while the U.S. Labor Department surveys about 140,000 businesses AND government agencies. While these conflicting reports are unsettling, there are signs of improvements in retail sales, along with increases in North American rail traffic. However, the lack of clarity from Washington policy makers on debt ceiling and other budgetary issues continues to contribute to global economic uncertainty.