U.S. companies unexpectedly cut 23,000 jobs in March
Private companies in the United States unexpectedly cut payrolls in March, according to new data.
The 23,000 decline was the smallest in two years and followed a revised 24,000 decrease in February, ADP Employer Services said Wednesday.
Over the previous six months, ADP’s initial figures have overstated the Labor Department’s first estimate of private payroll losses by as little as 2,000 in February to as much as 151,000 in November.
Companies are reluctant to add workers until they see sustained sales gains and are convinced the economic recovery has taken hold.
Economists surveyed by Bloomberg News anticipate the government’s unemployment report Friday will show payrolls increased by 184,000, in part because of temporary hiring by the federal government to conduct the 2010 census and because of better weather compared with February.
“The economic recovery has not been long enough or strong enough along the way yet to produce the kind of rapid employment that people are hoping for,” said Joel Prakken, chairman of Macroeconomic Advisers in St. Louis.
The ADP figures were forecast to show a gain of 40,000 jobs, according to the median estimate of economists surveyed by Bloomberg.
“Today’s figure does not incorporate a weather-related rebound that could be present in this month’s” report from the Labor Department, Prakken said. “It is reasonable to expect” that the government’s report will be “stronger” than the ADP estimate, he said.
The Labor Department’s report Friday is forecast to show the unemployment rate held at 9.7% in March for a third consecutive month. The jobless rate has declined since reaching a 26-year high of 10.1% in October.
The economy has lost 8.4 million jobs since the recession began in December 2007, the most of any downturn in the post-World War II era. In February, U.S. payrolls shrank by 36,000.
A separate report found that orders placed with U.S. factories rose in February for the 10th time in the last 11 months, while inventories and backlogs climbed the most in more than a year, a sign that factories will keep leading the economic expansion.
Bookings increased 0.6% after a revised 2.5% gain in January that was larger than previously estimated, the Commerce Department said.
Excluding demand for transportation equipment such as cars and airplanes, which tends to be volatile, orders rose 0.7%, the seventh consecutive advance.
Companies are benefiting as businesses work to stabilize stockpiles and prepare for rising sales in the U.S. and overseas.
A sustained rebound in the housing market and increased hiring have yet to materialize to ensure a broadening of the economic expansion.
“Manufacturing will keep driving the recovery as we get continued support from inventories and from rising demand,” said Aaron Smith, a senior economist at Moody’s Economy.com. “Inventories are starting to look lean relative to sales, so restocking will have to occur.”
Businesses expanded in March for a sixth straight month, a private report also showed. The Institute for Supply Management-Chicago Inc. said Wednesday that its business barometer fell to 58.8, lower than anticipated, from an almost five-year high of 62.6 in February. Figures greater than 50 signal growth.