The ADP report did not appear to be affected by a month-long strike by Verizon workers, which is expected to have sliced 35,100 jobs fr om nonfarm payrolls in May.
The striking workers, who returned to their jobs on Wednesday, were regarded as unemployed because they did not receive a salary during the payrolls survey week.
According to a Reuters survey, employment likely increased by 162,000 jobs last month after rising by 160,000 in April. The unemployment rate is forecast slipping to 4.9 percent in May from 5 percent in April.
"With the Verizon strike settled, job growth will bounce back in June," said Stuart Hoffman, chief economist at PNC Financial in Pittsburgh. "Job growth continues to run above the level needed to keep up with normal growth in the labor force, absorbing the job market slack remaining from the recession."
The economy needs to create about 100,000 jobs per month to keep up with population growth.
"Labor market conditions are stable, which is all the reassurance the Fed will need to act soon," said Paul Ashworth, chief U.S. economist at Capital Economics in Toronto.
Global Economy Stuck in Low-Growth Trap: OECD
The Organization for Economic Cooperation and Development has downgraded its forecast for economic growth, saying the global economy is stuck in a “low-growth trap” that governments urgently need to address through comprehensive national fiscal initiatives.
In its latest Global Economic Outlook, the OECD predicts global gross domestic product growth in 2016 will be flat at 3% due to weak trade growth, sluggish investment, subdued wages, and slower activity in key emerging markets. Growth is expected to improve to only 3.3% in 2017.
The forecasts for both years are down about 0.3% from the OECD’s projections in its last Outlook report in November 2015.
“We see the world economy stuck in a low-growth trap,” OECD Secretary-General Angel Gurría said, urging “comprehensive policy action … to ensure that we get off this disappointing growth path and propel our economies to levels that will safeguard living standards for all.”
OECD Chief Economist Catherine Mann said policymakers should coordinate fiscal and structural policies — rather than relying on monetary policies such as stimulus packages used by central banks in the U.S., euro zone, U.K. and Japan — to propel economies to the “high-growth path.”
“Monetary policy has been the main tool, used alone for too long,” she said. “In trying to revive economic growth alone, with little help from fiscal or structural policies, the balance of benefits-to-risks is tipping.”
For the U.S. economy, the OECD predicted growth of 1.8% this year, down from 2.5% in November and 2% in an interim report in February. The forecast for the Eurozone economy is 1.6% and Japan’s economic growth is projected at 0.7%.
The organization also warned that a U.K. vote to leave the European Union “would trigger negative economic effects on the U.K., other European countries, and the rest of the world,” causing economic uncertainty and hindering trade growth.
Fed's Tarullo indicated he is in no hurry to raise interest rates and said Brexit is factor in rate decision: Bloomberg
Federal Reserve Governor Daniel Tarullo on Thursday indicated he is in no hurry to raise interest rates.
In an interview with Bloomberg TV, Tarullo said he is in the camp of Fed officials that backs further, gradual, rate hikes but said he is more cautious about a move than some others in that camp.
One group favoring gradual rate hikes wants to hike “unless there is a reason not to” in order to avoid problems with inflation later on, he said.
The other camp, wh ere he sits, wants “an affirmative reason to move” and asks “why do we need” an interest rate hike. Tarullo said.
“The second approach I’ve been a little bit more inclined towards is to say ‘gee, you know, it is not clear what full employment is, we’re in a global environment that is not inflationary, we can perhaps get some more employment and some higher wages which will be particularly useful to those more on the margins of the labor force,’” Tarullo said.
Britain's possible exit from the European Union will be a factor as U.S. Federal Reserve policymakers weigh whether they should raise interest rates later this month, Fed Board Governor Daniel Tarullo said.
"In the short term it is more a question of the immediate impact on markets," Tarullo said in a Bloomberg TV interview. "If there are implications for growth over time, to the degree it's a factor (in the June rate decision) it's taking into account what will happen in financial markets and the immediate aftermath of the vote."
Tarullo also suggested he sees further scope for improvement in the labor market, saying "there is a possibility of getting more employment and higher wages."
Oil prices hold steady on lower US supplies
The commodity initially fell yesterday after the Organisation of the Petroleum Exporting Countries ended its meeting in Vienna with no agreement, as expected, to lower or cap output despite a global supply glut.
However, it rebounded after a US Department of Energy report showed commercial crude inventories sank by 1.4 million barrels last week, indicating a pick-up in demand in the world's top crude consumer.
US benchmark West Texas Intermediate for delivery in July was two cents up at $49.19 a barrel while Brent for August was four cents higher at $50.08.
Analysts said that OPEC's failure to agree a new ceiling had been priced in by the market.
Reference: DailyMail, CFO, CNBC, MarketWatch, RTE
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