23 June 2017

ADP Job Report: 263,000 Jobs Added In March

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Private-sector employment continued at a torrid pace in March, according to data released Wednesday morning, registering the second-strongest reading in more than two years.

Employers added 263,000 private sector jobs last month, up from a revised 245,000 in February, ADP Inc. reported.

The increase in March exceeded expectations. Economists polled by Econoday had forecast a March gain of 170,000 jobs compared with an original estimate of 298,000 for February.

President Donald Trump has claimed credit for the acceleration in the pace of job growth this year, as businesses look at the possibility of tax cuts, deregulation and infrastructure spending. Job gains have averaged 252,000 in the first three months of 2017.

“The gains are broad based but most notable in the goods producing side of the economy including construction, manufacturing and mining,” said Mark Zandi, chief economist at Moody’s Analytics, who helps prepare the report.

ADP Job Report 4-7-17
 

According to ADP, professional and business sectors added 57,000 jobs and leisure and hospitality added 55,000. There was another strong month for the construction industry, where 49,000 jobs were added, and the manufacturing sector added 30,000 positions.

Stocks  rose on the strong ADP data but gains evaporated after the Federal Reserve suggested it wants to start shrinking its $4.5 trillion balance sheet this year.

Economists use ADP’s data to get a feeling for the U.S. Labor Department’s employment report, which will be released Friday and covers government jobs in addition to the private sector. Economists polled by MarketWatch before ADP expected the government’s report to show nonfarm employment rose by 178,000 jobs last month, compared with a February gain of 235,000 jobs.

After the data was released, economists began to raise their estimates of March job growth.

Ted Wieseman, economist at Morgan Stanley, said he now looks for a 195,000 gain in March nonfarm payrolls instead of 150,000. And economists at Jefferies boosted their forecast to 185,000 from 145,000.

“Today’s data is making us scratch our heads once again because we had anticipated some payback following last month’s spike,” said Ward McCarthy, chief financial economist at Jefferies.

Other economists said they were sticking with their forecast of a pullback in job growth in March.

UBS economist Samuel Coffin said the government data is more sensitive to worsening March weather.

ADP calculates the data by using its own payrolls information, as well as unspecified other factors.

Click here for the original article from Market Watch. 

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