ADP: Job growth in private sector slows sharply in March
A worker registers job seekers during a job fair at California’s Great America theme park on in Santa Clara in February.
Hiring by U.S. businesses slowed sharply last month to 189,000, the worst performance in more than a year and another indication of sluggish economic growth over the winter.
The private sector added 189,000 net new jobs in March after an upwardly revised 214,000 the previous month, payroll firm Automatic Data Processing Inc. said Wednesday.
Last month’s figure was well below economists’ expectations of 240,000 and was the lowest number of net new private sector jobs recorded by ADP since January 2014.
“The fallout from the collapse in oil prices and surge in value of the dollar is hitting the job market,” said Mark Zandi, chief economist at Moody’s Analytics, which assists ADP in preparing the report.
“Despite the slowdown, underlying job growth remains strong enough to reduce labor market slack,” Zandi said.
The ADP findings are closely watched as a harbinger of the Labor Department’s more comprehensive monthly jobs report, which is to be released Friday. But, ADP’s job-growth figures for November, December and February were significantly lower than the Labor Department’s, and economists generally caution against reading too much into the firm’s data.
Forecasters expect the Labor Department to report Friday that the economy added about 247,000 net new jobs in March, down from 295,000 the previous month but still a healthy gain. The unemployment rate is expected to hold steady at 5.5%, the lowest level since May 2008.
Recent weak data have led to concerns that economic growth stalled over the winter, partly because of bad weather in the Northeast. The rising value of the dollar, which makes U.S. exports more expensive, also is a factor.
In addition, the sharp decline in oil prices, which began reversing last month, has caused problems for energy companies, Zandi said.
The pace of hiring fell off in the service sector, the biggest employment generator, with businesses adding 184,000 net new jobs in March, according to ADP. The sector added 192,000 jobs in February.
Manufacturing payrolls shrank by 1,000 in March after increasing by 2,000 the previous month, ADP said. The construction industry added 17,000 jobs last month, down from 28,000 in February.
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