NEW YORK – Growing optimism about the U.S. economy continued to increase today after a report on private employment levels showed businesses eliminated significantly fewer jobs in April than forecasters had expected.
The monthly employment report from ADP Employer Services showed payrolls fell by an estimated 491,000 workers last month, Bloomberg News reported. That was lower than the March figure, which itself was revised downward to 708,000 workers, from an earlier estimate of 742,000.
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It was also lower than the average projections in a survey of 28 economists by Bloomberg News that forecast a payroll decrease of 645,000 jobs.
“We’re seeing a very clear bottoming pattern,” John Herrmann, chief economist at Herrmann Forecasting in Summit, N.J., told Bloomberg. “This holds out the possibility that the fiscal stimulus, along with consumers resuming more normal spending patters, will lift the economy into positive growth in the second half.”
The ADP report comes two days before the U.S. Labor Department will release its latest national unemployment figure for the month of April. A Bloomberg survey found that economists expect the government to report payrolls at companies and government agencies shrank for the 16th consecutive month in April, falling by 610,000 and bringing unemployment to a 25-year high of 8.9 percent.
That would mean total job losses in the current recession have reached nearly 6 million since December 2007.
It also comes one day before the Treasury Department is scheduled to announce the much-anticipated results of its stress tests of 19 major financial institutions.
“We’re turning the corner on the economy,” James Paulsen, chief investment strategist at Wells Capital Management in Minneapolis, told Bloomberg. “Whatever people feel about the stress tests and their results is constantly being run over by better-than-expected information on the economy and earnings.”
In a separate report, Challenger, Gray & Christmas Inc. said U.S. employers announced 132,590 job cuts in April, which was 47 percent more than in the same month last year.
Federal Reserve Chairman Ben Bernanke warned Congress on Tuesday that unemployment in the U.S. “could remain high for a time, even after economic growth resumes.”
“There is a sense here of a turn,” Joel Prakken, chairman of Macroeconomic Advisers, said on a conference call with journalists reported by Bloomberg.
But “one month’s number does not a trend make,” Prakken added. “I’m still expecting to see several more months of notable decline in employment. There will be some bumps in the road on the way.”
