Saturday, 4 September 2010

US private sector adds jobs

US employment provided a positive surprise in August. Bloomberg reports:

Companies in the U.S. added more jobs than forecast in August, easing concern the world’s largest economy is sliding back into a recession.

Private payrolls climbed 67,000 after a revised 107,000 increase in July that was more than initially estimated, Labor Department figures in Washington showed today. The unemployment rate rose to 9.6 percent as more people looked for work...

Overall employment, including government agencies, fell 54,000 for a second month, compared with a median forecast for a decline of 105,000 in the Bloomberg survey. The decrease reflected a 114,000 drop in temporary workers hired by the government to conduct the 2010 census.

However, the ISM's non-manufacturing report provided a negative surprise.

Service industries expanded in August at the weakest pace in seven months, a report from the Institute for Supply Management showed today.

The group’s index of non-manufacturing businesses, which covers about 90 percent of the economy, fell to 51.5 from 54.3 in July. Readings above 50 signal growth and economists projected a decline to 53.2, according the median estimate in a Bloomberg survey.

In contrast, eurozone services provided a positive surprise in August but July retail sales came in below expectation. Again from Bloomberg:

Growth in Europe’s services and manufacturing industries weakened and retail sales rose less than economists forecast, adding to signs the region’s export- led recovery is losing momentum.

A composite index based on a survey of euro-area purchasing managers in both industries declined to 56.2 in August from 56.7 in July, London-based Markit Economics said today. That’s above an initial estimate of 56.1 published on Aug. 23. The gauge for services increased. A separate report showed retail sales rose 0.1 percent in July, less than the 0.2 percent median forecast of 20 economists in a Bloomberg News survey...

The index of services, which account for about 60 percent of the region’s GDP, rose to 55.9 from 55.8. A gauge of manufacturing declined to 55.1 in August from 56.7 in July, according to a Sept. 1 report.

In the UK, the services PMI became yet another piece of evidence of a slowing economy. Reuters report:

British service sector activity grew last month at its slowest pace since April 2009, with a marked fall in hiring as employers worried about an economic slowdown and public spending cuts, a survey showed on Friday.

The headline Markit/CIPS services purchasing managers' index dropped to 51.3 in August from July's 53.1, a much sharper fall than the decline to 52.9 forecast in a Reuters poll.

The downbeat services reading follows bigger-than-expected falls in the PMIs for manufacturers and construction, though all are still above the 50 line that divides growth from contraction.

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