The ADP Number And The Double-Dip Recession

The RealtyTrac numbers from this morning showed that improved housing activity in March and April was caused by federal tax breaks and low mortgage rates. Once those benefits disappeared, home sales and home starts collapsed. Buyers are either seeking the deals on foreclosed homes or ones with large government incentives.

Today’s ADP private sector payroll information shows that any improvement in hiring has disappeared. Weekly jobless claims, which has not shown any substantial change in two months, confirm this

This data make it likely that the June BLS unemployment numbers will be much worse than expected even when the drop in Census workers is figured in.

Employment and housing numbers are both moving in reverse back toward levels from late last year.

The ADP data:

Nonfarm private employment increased 13,000 from May to June 2010 on a seasonally adjusted basis, according to the ADP National Employment Report®. The estimated change in employment from April to May 2010 was revised up slightly, from the previously reported increase of 55,000 to an increase of 57,000.

June’s rise in private employment was the fifth consecutive monthly gain.

Douglas A. McIntyre