Employers in the private sector hired
129,000 workers in March, payroll processor ADP said
Wednesday. That was the weakest showing in 18 months and missed the consensus
among economists surveyed by Econoday for job gains of 165,000.
What
happened: “The job market is weakening,”
Moody’s Analytics Chief Economist Mark Zandi said. Still, February figures were
raised by 14,000 jobs.
In March, small businesses added
just 6,000 jobs, medium-size firms added 63,000, and large employers hired
60,000 workers. All of the gains were in the service sectors: goods-producers
lost 6,000 jobs.
“The economy is struggling with
fading fiscal stimulus, the trade uncertainty, and the lagged impact of Fed
tightening,” Zandi added. “If employment growth weakens much further,
unemployment will begin to rise.”
Related: A big increase in hiring in March would help soothe all
the heartburn over the economy
Big
picture: “The ADP estimate is not a good
predictor of the official BLS figure (due Friday), it’s only one month, and the
trend remains strong. However, the tone of this report (the ADP’s perspective)
is poor, suggesting a possible broader-based softening in labor market
conditions,” said Scott Brown, chief economist for Raymond James. “The weaker
global economy and trade policy uncertainty are a drag on the goods-producing
sector.”
The MarketWatch consensus forecast
for the Labor Department’s more closely followed employment report to be
released Friday is for a gain of 179,000 jobs.
Jim O’Sullivan, chief U.S. economist
for High Frequency Economics, said after the ADP release that he was sticking
with his original forecast for a 200,000 rise in payrolls to be reported by the
Labor Department. O’Sullivan has been MarketWatch’s “Forecaster of the Year” for
eight years running.
Market
reaction: The Dow Jones Industrial Average DJIA, +0.07% and the S&P 500 index SPX, +0.33% were up fractionally in
morning trading as investors anticipated a positive resolution to the
U.S.-China trade talks.
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