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By Jason Stipp and Robert Johnson, CFA | 10-02-2013 12:00 PM

Job Market Still Slogging

Lackluster ADP data suggest that August's mediocre job growth likely seeped into September, too, says Morningstar's Bob Johnson.

Jason Stipp: I'm Jason Stipp for Morningstar. We got ADP employment data for the private sector for the month of September on Wednesday. It showed 166,000 jobs were added to the economy. This on a week when the government shutdown means we won't see a government employment report for September, but here to offer his take on the data we do have is Morningstar’s Bob Johnson, our director of economic analysis. Thanks for joining me, Bob.

Bob Johnson: Great to be here today.

Stipp: We did get the ADP report. We’re probably not going to see a government report due to the shutdown, but let’s talk about the data that we do have; 166,000 private-sector jobs added is very flat based on the trends we’ve seen over last few months.

Johnson: It's really lethargic. I mean, we’ve kind of now got July, August, and September all at the same number, at about 160,000 or so, and that's down from the 190,000, according to ADP, that we saw in June. We kind of stepped down and kind of stayed at that depressed level. Fortunately, that probably means the slow job report that we saw for August from the government, was likely not an accident, that we will probably see yet another month of relatively slow job growth, if the number ever sees the light of day from the government.

Stipp: Some economists were expecting a better report for September. What was behind some of that optimism?

Johnson: Well, on the ADP number, first of all, the consensus estimate was 180,000 private-sector jobs, and we got 166,000. Obviously, it was a disappointing number overall from ADP. I think in terms of the pluses and minuses for what people looked at, this was probably perhaps one of the more controversial forecasts that were out there or the most divergent. I mean, I saw numbers as low as 160,000 and as high as 220,000 for the official government number, if it were to come out on Friday. The bullish camp was very excited about data from the purchasing managers’ surveys from the Institute of Supply Management, which suggested decent employment and overall growth in manufacturing. That was a reason for optimism. The low initial unemployment claims which are at a recovery low, really got people excited that we might see some dramatic improvement in the number. Those were probably the two bullish things in there. Then on the bearish side, there were a number of forces at work.

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