ADP: Hiring slowed significantly in April

How bad will Friday’s employment for April be?  The ADP report, which usually paints a rosier picture of private-sector job gains, shows a decline in growth of almost half from their March report:

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Employment in the U.S. nonfarm private business sector increased by 119,000 from March to April on a seasonally adjusted basis. The estimated gain from February to March was revised down modestly, from the initial estimate of 209,000 to a revised estimate of 201,000.

Employment in the private, service-providing sector increased 123,000 in April, after rising 158,000 in March. Employment in the private, goods-producing sector declined 4,000 jobs in April. Manufacturing employment dropped 5,000 jobs, the first loss since September of last year.

Employment on large payrolls—those with 500 or more workers—increased 4,000 and employment on medium payrolls—those with 50 to 499 workers—rose 57,000 in April. Employment on small payrolls—those with up to 49 workers—rose 58,000 that same period. Of the 57,000 jobs created by medium- sized businesses, 8,000 jobs were created by the goods producing sector and 49,000 jobs were created by the service-providing sector.

Construction employment also fell by 5,000, the first decline in seven months and following healthy gains during the unusually warm winter months. Employment in the financial services sector increased 13,000 in April, marking nine consecutive monthly gains there.

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The Wall Street Journal calls this “anemic”:

Private businesses hired at an anemic pace in April as factory jobs declined, according to a report released Wednesday.

Private-sector jobs in the U.S. increased 119,000 last month, according to a national employment report calculated by payroll processor Automatic Data Processing Inc.ADP -1.22% and the consultancy Macroeconomic Advisers.

The gain was less than economists’ median expectation of 175,000 in a survey done by Dow Jones Newswires.

Bear in mind that ADP usually overestimates the official growth numbers, and you’ll see why the WSJ had such a poor reaction.  That suggests a below-100K number for Friday, which with population growth factored in would mean a net decline in jobs.

Nor is that the only bad news today.  Predictably, the horrid durable-goods numbers for March pulled down overall factory orders, too — to their worst performance in three years (via Dogsoldier):

New orders for U.S. factory goods in March recorded their biggest decline in three years as demand for transportation equipment and a range of other goods slumped, government data showed on Wednesday.

The Commerce Department said orders for manufactured goods dropped 1.5 percent after a revised 1.1 percent rise in February.

Economists had forecast orders falling 1.6 percent after a previously reported 1.3 percent increase in February.

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The markets reacted poorly to the news:

U.S. stocks fell early Wednesday as a weak private-sector jobs report overshadowed upbeat corporate results.

The Dow Jones industrial average (INDU) fell 53 points, or 0.4%, in early trading. The S&P 500 (SPX) declined 8 points, or 0.6%, and the Nasdaq (COMP) lost 6 points, or 0.2%.

Expect a lot of “unexpected” reports on Friday, and not of the positive kind.

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Jazz Shaw 9:20 AM | April 19, 2024
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