Census Worker Layoffs Expected to Weigh on Unemployment Data

An estimated 13,000 jobs were added to non-farm private payrolls from May to June, according to the latest Automatic Data Processing (ADP) national employment report published today (download here). It marks the fifth consecutive month of gains in the ADP report, but a relatively weak gain. The same report noted 55,000 jobs added to non-farm private payrolls in May. The ADP report does not include the effects of federal hiring for the 2010 Census, unlike the employment figures to be released on Friday by the Department of Labor Bureau of Labor Statistics (BLS). “Hiring for the census may have peaked in May,” said Joel Prakken, chairman of analysis firm Macroeconomic Advisers, in a statement. “For this reason, Friday’s figure for the change in non-farm total employment reported by the BLS might be weaker than today’s estimate for non-farm private employment in the ADP Report.” While this private-sector hiring remained positive — but weak — in June, analysts expect the economy lost a total 152,000 jobs due to massive layoffs of temporary workers by the Census Bureau, according to TrimTabs Investment Research. Because of the winding down of the 2010 Census efforts, TrimTabs estimates the Census Bureau laid off 243,000 temporary employees in June. “The big news is that private sector added just 91,000 jobs in June, much less than the 150,000 needed to keep up population growth,” said TrimTabs CEO Charles Biderman. “Investors are starting to realize that the economy is going to grow a lot more slowly than forecast.” The firm noted that multiple indicators suggest the economy is slumping. For example, tax data shows wages and salaries are declining while initial unemployment claims remain high. At the same time, TrimTabs said, the housing market is weakening. “Surging demand for homes and durable goods generally fueled strong economic recoveries in the past,” Biderman noted. “But now that the government has stopped doling out cash to people to buy houses, cars, and appliances, where’s the unfulfilled demand to boost the economy?” The firm also warned that one million to two million municipal and state employees could lose their jobs by the end of 2011 without huge tax increases or massive federal aid. Both issues of an impending deadline for federal home-buying incentives and a lapse in unemployment benefits are addressed in a piece of proposed legislation that could be approved by the Senate and signed into law today. Sens Harry Reid (D-NV) and Max Baucus (D-MT) introduced legislation to extend the purchase closing date for the first-time homebuyer tax credit after the House passed its own version of the bill on Tuesday. The Senate bill also retroactively reinstates federal unemployment insurance benefits that expired at the end of May. Write to Diana Golobay.

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