In each Economic Update, the Research staff analyzes recently released economic indicators and addresses what these indicators mean for REALTORS® and their clients. Today’s update discusses jobless claims and ADP payroll data.
- The employment situation appears to be improving again based on the initial claims for unemployment insurance data released by the Department of Labor and the private payroll count computed by ADP, a payroll processing company. This data points to a likely improvement in the June official employment data to be released tomorrow by the Bureau of Labor Statistics. To note, for Presidential election campaigns, the ADP data will not matter and only BLS jobs data will be mentioned.
- Initial claims for unemployment insurance for the week ending June 30 dropped to 374,000 from the revised (upward) estimate of 388,000 the previous week. The 4-week moving average, which is less volatile, put the average claims for the last 4 weeks at 385,000 thousand. There was an uptick in claims in the last week of May and the first two weeks of June, but the latest data over the past two weeks has initial jobless claims coming back down, although slowly.
- Meanwhile, ADP, a company that processes private payroll, released the private payroll count for June. Private payroll expanded to a better-than-expected figure of 176,000, up from 133,000 in May. The movement in ADP private payroll data has generally tracked the official private non-farm jobs generated figures of the Bureau of Labor Statistics (see chart and table below).
- Thus, we expect that the official June employment data released tomorrow will also show stronger gains in private employment and a slightly lower unemployment rate, assuming that these gains are not severely eroded by the loss of government jobs, which have been in in the range of about 5,000 to 10,000 a month.
- A positive employment situation will make the ongoing uptrend in both sales and prices more robust and sustained.