Weak labour markets remain an obstacle to the recovery. Private payroll gains increased by only 42,000 in July, as large business added no new workers, according to data released Wednesday.
Private-sector jobs in the U.S. increased by 42,000 last month, according to a national employment report published by payroll giant Automatic Data Processing Inc. and consultancy Macroeconomic Advisers.
Economists had expected ADP to report a job gain of 39,000 in June. The estimated change in employment for June was revised to a gain of 19,000 from an increase of only 13,000 first reported.
The ADP survey tallies only private-sector jobs, while the Bureau of Labor Statistics' nonfarm payroll data, to be released Friday, include government workers.
Economists surveyed by Dow Jones Newswires expect that continued layoffs of government workers hired for the Census will mean a drop of 60,000 jobs from total July nonfarm payrolls. Among those economists forecasting private-sector jobs within the BLS data, the median projection is for a gain of 100,000.
The July unemployment rate is projected to edge up to 9.6% from 9.5% in June.
Without better job growth, consumers have contributed modestly to the recovery and ended the second quarter with wallets shut. Personal income was flat in June, leading to no change in consumer spending as well.
Federal Reserve Chairman Ben Bernanke said in a speech given Monday that "the slow recovery in the labour market and the attendant uncertainty about job prospects are weighing on household confidence and spending."
The latest ADP report showed large businesses with 500 employees or more added no new employees and medium-size businesses hired 21,000 workers in July. Small businesses that employ fewer than 50 workers lifted payrolls by 21,000.
Service-sector jobs added 63,000 last month, while factory jobs fell by 6,000.
ADP, of Roseland, N.J., says it processes payments of one in six U.S. workers, while Macroeconomic Advisers, based in St. Louis, is an economic-consulting firm.
Other job reports also show very slow improvement in the labour markets that will barely cut the jobless rate.
Employers announced plans to shed 41,676 workers in July, a 6% increase from the 39,358 layoffs in June, according to global outplacement firm Challenger, Gray & Christmas. The report added that, although July marks the third consecutive monthly gain in announced job cuts, downsizing activity remains at its lowest level since before the 2001 recession.
Also on Wednesday, TrimTabs Investment Research said that because of 75,000 layoffs by the Census Bureau, the economy lost about 5,000 jobs in July with private sector hiring adding 70,000.
TrimTabs bases its employment estimates on an analysis of daily income tax deposits to the U.S. Treasury from all salaried employees.
