ADP: April Job Growth Slowed
U.S. private-sector job growth was weaker last month, with businesses adding just 169,000 new positions, according to payroll firm Automatic Data Processing (ADP). The numbers surprised economists, who had been expecting a gain of 205,000 jobs after a stagnant March. The 169,000 reported job gain was the slowest growth since January of 2014, ADP said. ADP also downgraded its March jobs figure to 175,000 from its initial estimate of 189,000.
After 13 months of adding more than 200,000 jobs, the private sector is below that figure two straight months – something that hasn’t happened since the winter of 2013-2014. Manufacturing companies reduced payrolls by 10,000 in April, a sharper decline than March’s 3,000-job reduction. Construction was up 23,000, from 21,000 in March. Smaller firms (1-49 employees) added 94,000 workers in April, medium-sized businesses (50-499) hired 70,000 employees and large companies (500 or more) increased payrolls by just 5,000 positions.
“Fallout from the collapse of oil prices and the surging value of the dollar are weighing on job creation,” said Mark Zandi, chief economist at Moody’s Analytics, which partners with ADP to prepare the monthly jobs report. “Employment in the energy sector and manufacturing is declining. However, this should prove temporary, and job growth will reaccelerate this summer.”
The Bureau of Labor Statistics will release its April jobs report on Friday. The Federal Reserve has been watching the labor market closely, in order to determine whether to raise short-term interest rates for the first time since 2006. A rate hike could come as early as next month, though many economists forecast the central bank to hold off until September or later following little Q1 GDP growth.