An ADP jobs report on April job creation tumbled from a troubling low of 201,000 in March to a dismal 119,000 in April, casting doubt on President Obama's February assessment that the U.S. economic recovery is picking up speed.
Yet another disappointing jobs report is fueling speculation that the American economic recovery has stalled out as the Obama administration politicizes the Osama bin Laden slaying by Navy Seals during the presidential election season.
The ADP report reflects the non-farm private jobs growth rate, a yardstick for measuring economic development and an indicator for future unemployment rates.
Steady job creation of between 250,000 and 300,000 jobs per month are needed to pull the nation’s 8.3% unemployment rate back down to precession levels.
Stocks were set to pull back Wednesday on the disappointing jobs report, according to CNN.
In January, ADP reported a sluggish 182,000 new jobs but when private job creation jumped to a still-anemic 233,000 in February, the Obama administration took full credit for an economic recovery saying “the economy is getting stronger, and the recovery is speeding up.”
Investors looking for reassurance that the U.S. recovery is on solid ground were disappointed in Tuesday's numbers and still more question whether the U.S. is in an economic recovery or on the threshold of a second recession.
Many analysts who predicted job creation would grow at a rate of 170,000 in April were surprised at the downward spiral in job creation after strong manufacturing activity drove gains in the stock market Tuesday. The ADP report suggests the economic recovery Obama said was “speeding up” has actually slowed significantly or come to a halt.
Adding to a gloomy economic picture, U.S. factory orders for the month of March are expected to have dropped by 1.8%. One thing most financial analysts agree on is that the ADP jobs report shows a significant decline from March, and when taken as a whole, jobs growth for the year has been lackluster at best.
Meanwhile, unemployment within the European Union stayed at 10.2% in March, according to a government report released Wednesday. The European Union is made up of 27 member nations. But the 17-nation eurozone unemployment figures edged up to 10.9%, from a 10.8% rate. Both unemployment rates are record highs since the creation of the common currency.
At least 13 European nations are reporting double-digit unemployment; the highest rates are 24.1% in Spain and 21.7% in Greece. Spain officially entered a double-dip recession on Tuesday.