Census Firings Expected to Weigh on Weak July Private Sector Job Growth

Nonfarm private sector employers added an estimated 42,000 jobs to payrolls in July, according to the Automatic Data Processing (ADP) national employment report published today (download here). The ADP’s estimates do not include layoffs of temporary workers no longer needed for the 2010 Census, however, and analysts are expecting total payrolls to decline in official data, due Friday. ADP also revised its estimate for the increase from May to June up 46% to 19,000, from the initial 13,000 estimate. July marks the sixth consecutive monthly increase in private employment. Monthly gains in private employment averaged 37,000 over the past six months, ADP noted, “with no evidence of acceleration.” ADP estimates nonfarm private employment in the service-providing sector rose by 63,000. Employment in the goods-producing sector declined 21,000, while employment in manufacturing fell 6,000. The estimate arrives ahead of total employment figures to be released Friday by the Department of Labor Bureau of Labor Statistics (BLS). ADP’s private label employment numbers do not include the effects of federal hiring for the 2010 Census — which peaked in May. TrimTabs Investment Research estimates official numbers will show the economy shed a total 5,000 jobs in July. The firm expects that the private sector added 70,000 jobs, which partially offset an expected 75,000 layoffs at the Census Bureau. Capital Economics, on  the other hand, expects twice as many Census-related layoffs and a 75,000-job growth in total payrolls, for an expected decline of 75,000 in all of July. TrimTabs noted that private sector employment growth “slowed abruptly” in June and July — when less than 150,000 workers, combined, were added to private payrolls. “Massive government stimulus may have boosted financial markets, but it has done little for the real economy,” said TrimTabs CEO Charles Biderman in a research note. “Economic growth is decelerating, not accelerating. A sustainable economic recovery requires strong job growth, and we see no sign of that on the horizon.” Write to Diana Golobay.