ADP Shows Private-Sector Hiring Cooled to 156,000 in April
May 04 2016 - 9:30AM
Dow Jones News
Hiring by the private sector cooled in April, a sign that
concerns over the global economy may have impacted payroll growth
at many American businesses.
Private payrolls across the U.S. rose by 156,000 last month,
said payroll processor Automatic Data Processing Inc. and
forecasting firm Moody's Analytics. Economists surveyed by The Wall
Street Journal expected an increase of 196,000.
The lower-than-expected reading came as March's increase was
revised lower by 6,000 to 194,000.
"The job market appears to have stumbled in April," said Mark
Zandi, chief economist of Moody's Analytics, noting weakness across
most sectors. "The financial market turmoil earlier in the year may
have done some damage to business hiring," he said.
While the service sector, home to most of the nation's workers,
continued to drive payrolls higher in April, service providers
reined in hiring from March. Firms across the sector added 166,000
workers, down from 189,000 a month earlier. Manufacturers,
meanwhile, shed 13,000 jobs after cutting 3,000 a month earlier.
While recent reports have suggested the beleaguered factory sector
has turned the corner, employers in the sector are waiting for
evidence of a lasting improvement before adding payrolls.
Small businesses, which account for about two-thirds of American
jobs, grew payrolls by 93,000 during the month, steady from March.
But hiring by bigger firms decelerated, with medium-size companies
adding 39,000 workers, down from 66,000 in March, and big
businesses adding 24,000, about a third lower than in the previous
month. Smaller businesses are less vulnerable global factors,
including the strong U.S. dollar that hurts exports and low
commodity prices.
An early Easter may have affected the report. While the holiday
this year came well after the survey date for the government's
employment report, the ADP report is different because its model
incorporates other economic data that may have been affected, such
as business sales and industrial production, said Ian Shepherdson,
chief economist at Pantheon Macroeconomics.
Some other job-market indicators, such as initial claims for
jobless benefits, have continued to paint a picture of a robust
labor market, though many Americans are still waiting a breakout in
wages. Economists are similarly awaiting a wage pickup to spark
stronger economic growth.
The ADP report comes ahead of the Bureau of Labor Statistics's
March employment-situation report, due out Friday morning. ADP lags
behind the government's initial private payroll estimate by a
month, and it doesn't aim to replicate the government's nonfarm
payrolls survey.
Economists polled by The Wall Street Journal expect the BLS to
report an increase of 200,000 nonfarm payrolls, down modestly from
215,000 in March and alongside an unemployment rate that holds
steady at 5.0%. David Ader, fixed income strategist at CRT Capital,
notes that ADP has been undershooting private nonfarm payrolls by
an average of 28,000 over the past six months.
Write to Lisa Beilfuss at lisa.beilfuss@wsj.com
(END) Dow Jones Newswires
May 04, 2016 09:15 ET (13:15 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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