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Weak ADP Report Shows Housing Is Still No. 1 Problem for Economy

The case that it can't is rooted mostly in soft new-home sales numbers and weak homebuilder confidence. And in lingering fears that people simply can't afford homes -- even though simple comparisons of home prices, mortgage rates, and the incomes people already have prove that isn't true.

The official Labor Department jobs report comes out Friday, and ADP's soft number doesn't necessarily mean forecasts for 215,000 new jobs are in trouble. In April, the government's number of 288,000 new jobs was 68,000 higher than ADP's. 

The bottom line: The economy still looks like it's in the same band of about 200,000 jobs a month it has been in. That can still push unemployment below 6% by the year's end, or lower if the expected summer pickup happens. But the May miss reminds us yet again that we have been looking for this ever-elusive breakout to 250,000 or 300,000 jobs a month -- and the nearly full employment with at least fattish raises that kind of growth promises -- for a long time now.

At the time of publication, the author held no positions in any of the stocks mentioned.

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

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