WASHINGTON: US private employers added 176,000 jobs in August and new claims for jobless benefits fell last week, which could bolster expectations the US Federal Reserve will begin winding down a bond-buying stimulus programme this month.
Payrolls processor Automatic Data Processing (ADP) said yesterday that private sector employment expanded less than in July, but analysts said the data still backed the consensus view that a more comprehensive employment report, due today, will show improvement.
“(It’s) enough to reinforce expectations that the Fed will begin to taper its asset purchases,” said Paul Ashworth, an economist at Capital Economics in Toronto. Economists surveyed by Reuters had forecast the ADP National Employment Report would show a gain of 180,000 jobs. July’s private payrolls gains were revised to 198,000 from the previously reported 200,000. The report is jointly developed with Moody’s Analytics.
The ADP data comes one day before the US government’s report on August non-farm payrolls, which investors will scour in hopes of divining the future direction of the Fed’s massive asset-buying programme.
The Fed is now weighing when to pull back on its purchases of $85bn per month in Treasuries and mortgage-backed securities. Views that the Fed could slow its buying pace as soon as its September 17-18 meeting sent Treasuries yields to two-year highs recently.
But policy makers say their decisions will depend on data showing the health of the world’s biggest economy. Policy makers want to see the unemployment rate closer to 6.5 percent from its current 7.4 percent.
Economists in a Reuters poll, however, see the August unemployment rate remaining flat. Separately, the Labour Department said the number of Americans filing new claims for jobless benefits fell 9,000 last week to 323,000, a near five-year low.
Economists polled by Reuters had expected first-time applications to fall to 330,000 last week. The four-week moving average for new claims fell to its lowest level since October 2007, before the 2007-09 recession began.
Reuters
