Instant View: Private sector adds 135,000 jobs in May

Reuters

Private employers added 135,000 jobs in May, falling short of economists' expectations, a report by a payrolls processor showed on Wednesday.

Economists surveyed by Reuters had forecast the ADP National Employment Report would show a gain of 165,000 jobs.

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As well, April's private payrolls were revised down to an increase of 113,000 from the previously reported 119,000.

COMMENTS:

RUSSELL PRICE, SENIOR ECONOMIST, AMERIPRISE FINANCIAL SERVICES INC, TROY, MICHIGAN:

"It is reflective of the continuation of the soft patch that the economy has been going through, but looking forward it seems that we're starting to gain a little bit of traction, and most importantly that's been most evident in consumer spending and consumer attitudes.

"I tend to think that Friday's report will be a little bit weaker than what expectations are forecasting, which are right around that same level of 165,000 that people were looking for in ADP.

"So I think it will be a little weaker, because I think it's too early to expect an improvement in the labor market in the month of May. We'll begin to see that in June and it should begin to gain traction in July and moving beyond.

MARKET REACTION:

STOCKS: U.S. stock index futures held losses BONDS: U.S. bond prices expanded gains FOREX: The dollar extended losses versus the yen, the euro rose

GRAPHICS: ADP vs. the U.S. Labor Department: The ADP National Employment Index shows an increase of 135,000 private sector jobs in May - 45,000 fewer than analysts expect Friday's Labor Department report to show. http://link.reuters.com/fex44t

(Americas Economics and Markets Desk; +1-646 223-6300)