Economic Data Bleak for U.S. this Week

The U.S. economy got hit with a trio of gloomy economic news on Wednesday, led by a weak national private-sector jobs report and the worst existing homes sales report since September 2001.

In its monthly private-sector jobs report, human resources giant ADP reported that non-farm private employment in the U.S. grew by a meager 38,000 in August, and lowered its July figure from 48,000 to 41,000. ADP said in a press release that the report “suggests that a deceleration of employment may be underway” in the U.S.

The ADP National Employment Report uses anonymous payroll data compiled by ADP and is computed by economics firm Macroeconomics Advisers. The ADP report is seen as a pre-cursor to the more closely-watched Labor Department monthly report on non-farm jobs, which is due out on Friday. Economists polled by both MarketWatch and Bloomberg estimate that non-farm jobs in the U.S., including government jobs not covered in the ADP report, expanded by about 120,000 in August. Some economists are cutting back estimates now in the wake of the ADP report.

In other economic news, the National Association of Realtors reported today that contract signings on existing homes fell more than 12 percent in July, when compared to signings in June. The drop in the NAR’s pending homes sales index is the largest since the index was started in 2001, and now stands at 89.9, its lowest level since September 2001 when the index read 89.8. Contract signings in July 2007 were more than 16 percent lower than in July 2006.

Lawrence Yun, NAR senior economist, said in a press release that abnormal factors are clouding the horizon. "It’s difficult to fully account for mortgage disruptions in the index, and our members are telling us some sales contracts aren’t closing because mortgage commitments have been falling through at the last moment," he said.

Rounding out the difficult economic news was a report from the United Nations that said U.S. gross domestic product growth would lag behind both the European Union and Japan in 2007 for the first time since 2001. The UN Conference on Trade and Development said in its annual report that the U.S. housing market would bring GDP growth in the U.S. down to around 2 percent for all of 2007. Global growth is expected to come in at around 3.4 percent, down from 4 percent last year.

The U.S. stock market, which has seen volatile sessions nearly every day for the past two months, was down significantly in early trading Wednesday with the Dow Jones Industrial Average reporting a loss of around 150 points at midday.