Thursday, September 06 16:26:58
U.S. private employers added a stronger-than-expected 201,000 jobs in August and new claims for jobless benefits fell last week to the lowest level in a month, upbeat signals for a struggling labour market.
Another report today showed the pace of growth in the service sector accelerated last month due to growth in employment and exports.
The data is the latest to hint that the U.S. economy is gaining a bit of steam but it also suggests growth is too weak to make a big dent in the still-high unemployment rate, keeping alive chances the Federal Reserve launches a new bond buying program as soon as next week.
"We wouldn't expect this improvement to persuade the Fed to hold fire next week," said Paul Ashworth, an economist with Capital Economics in Toronto.
The increase in private hiring, reported by payrolls processor ADP, was the largest since March and easily beat economists' expectations.
However, economists still think the government's more comprehensive employment report due on Friday will show only modest hiring during August.
"The implications really are that employment is growing but not at a strong pace," said Sean Incremona, an economist at 4Cast in New York.
The government's job report is expected to show nonfarm payrolls rose by 125,000 last month, while the unemployment rate is seen staying the same at 8.3 percent. Analysts often refer to the ADP report to fine-tune their expectations for the payrolls numbers, though it is not always accurate in predicting the outcome. Over the last three months, the report has overstated gains in private payrolls by about 45,000 per month, according to analysts at Credit Suisse.
Housing and retail sales data have also suggested economic activity picked up early in the third quarter, although business spending is weakening and inflation is slowing. The weak U.S. economy is center stage in the presidential election campaign and weak jobs growth has caused deep concern at the Fed.
U.S. stocks rose and prices for U.S. government debt prices fell following the data's release and an announcement by European Central Bank chief Mario Draghi that the institution agreed to a new bond-buying program to try to stem Europe's debt crisis. (C ) Reuters