Private Hiring Picks Up, Jobless Claims Fall
U.S. private employers stepped up hiring in June and the number of Americans filing for jobless benefits fell last week, strengthening views that the economy is positioned for a pickup in the second half.
Payrolls processor ADP said on Thursday that private sector employment increased 157,000 after a modest 36,000 gain in May -- beating economists' expectations for a 68,000 rise.
A separate report from the Labor Department showed initial claims for state unemployment benefits dropped 14,000 to a seasonally adjusted 418,000 last week. The decline was more than economists' expectations for a fall to 420,000.
The improvement in claims at the start of the third quarter and the pick up in private hiring were the latest hopeful signs that conditions were now in place for the economy to regain the momentum lost in the first half.
"It's generally a confirmation that the weakness we saw in the May data was more in the way of a bump in the road rather than falling off into some abyss," said David Resler, chief economist at Nomura Securities International in New York.
"The soft patch will prove to be a temporary one, but that doesn't mean we'll be roaring ahead with growth."
The government had been expected to report on Friday that non-farm payrolls increased by 90,000 last month, according to a Reuters survey, after rising only 54,000 in May. However, the ADP report had some economists bumping up their forecasts.
U.S. stock index futures added to gains on the data, while government bond prices extended losses. The dollar rose against the yen.
With gasoline prices falling, automakers cranking up production and the decline in house values moderating, the dark clouds over the U.S. economy are starting to lift.
Separately, first sales reports for June from top U.S. retailers showed better-than-expected sales gains.
Costco Wholesale Corp. reported a 14 percent gain in sales at stores open at least a year, suggesting that retailers generally beat Wall Street estimates.
Though jobless claims fell last week, they remained above 400,000, a level that is usually associated with a stable labor market, for a 13th straight week.
The four-week moving average of unemployment claims, a better measure of underlying trends, fell 3,000 to 424,750.
The number of people still receiving benefits under regular state programs, after an initial week of aid, dropped by 43,000 to 3.68 million in the week ending June 25.
The number of people on emergency unemployment benefits declined by 44,183 to 3.26 million in the week ending June 18, the latest week for which data is available. A total of 7.46 million people were claiming unemployment benefits during that period under all programs, down 61,327 from the prior week.
(Reporting by Lucia Mutikani; editing by Andrea Ricci.)
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