Job Growth Moderates In March
Small Biz Continues To Fuel Economy
Private sector payrolls increased by 189,000 jobs last month, the first time that monthly gains were less than 200,000 since January of last year, according to the latest employment report released by payroll firm ADP. The decline was centered on the largest companies, those with 1,000 or more employees. ADP’s numbers came in below economists’ expectations for an increase of 225,000. Experts pin the results on a harsh winter, strong dollar and weaker global demand.
“Job growth took a step back in March,” said Mark Zandi, chief economist at Moody’s Analytics, which helps ADP develop its National Employment Report. “The fallout from the collapse in oil prices and surge in value of the dollar is hitting the job market. Despite the slowdown, underlying job growth remains strong enough to reduce labor market slack.”
Small businesses continue to fuel the economy, according to the ADP report. Companies with 1 to 49 workers added 108,000 new employees last month, whereas midsize firms added 62,000 jobs and large companies with 500 or more employees added only 19,000 more workers. Manufacturing cut 1,000 jobs in March. The services sector added 184,000 and construction added 17,000, according to ADP.
ADP’s report was released ahead of the much-anticipated and more comprehensive jobs report to be released by the government on Friday. Though ADP’s report doesn’t always agree with the government’s report, it does raise the risk that it will also be softer than economists had forecast, which in turn could prompt the Federal Reserve to delay an expected interest rate increase until September. The Fed has not raised rates since 2006.
“The economy hit yet another rough spot in the first quarter … which is one of many factors that will make it difficult for the Fed to achieve ‘liftoff’ by midyear,” Diane Swonk, chief economist at Mesirow Financial, told Reuters.