An unemployed American speaks to a recruiter at a jobs fair. (Photo: Mark Ralston AFP/Getty)
The U.S. private sector added just 189,000 jobs in March, far below the 225,000 jobs economists expected, according to payroll processor ADP. The number represents a stark drop from the upwardly revised 214,000 jobs created the month prior.
“March job gains came in under 200,000 for the first time since January of last year,” said Carlos Rodriguez, president and chief executive officer of ADP. “The decline was centered in the largest companies, those with 1000 or more employees.”
The ADP National Employment Report is the latest indicator that U.S. economic growth is cooling more than economists previously anticipated. U.S. consumer spending, which accounts for roughly two-thirds of all economic activity barely rose in February, up 0.1 percent without adjusting for inflation as household savings hit their highest level in more than two years.
Payrolls for businesses with 49 or fewer employees increased by 108,000 jobs in March, up from 103,000 in February. Employment among companies with 50-499 employees increased by 62,000 jobs, up from 57,000 the previous month. Employment at large companies – those with 500 or more employees – decreased from February adding 19,000 jobs, down sharply from 53,000. Companies with 500-999 employees added 7,000 jobs, down from February’s 11,000. Companies with over 1,000 employees added 12,000 jobs, down from 43,000 the previous month.
However, particularly concerning wage growth, a sector-by-sector look at the numbers indicate the U.S. economy continues to create quantity over quality, though the amount of jobs is still far below the 250,000 needed simply to keep pace with population increases.
Goods-producing employment added just 5,000 jobs in March, down from the 22,000 jobs created in February, while the decent-paying construction industry added just 17,000 jobs, down from 28,000 last month.
Manufacturing, also a higher-paying sector, actually lost 1,000 jobs in March after adding only 2,000 in February.
As usual, the low-paying service-providing sector led the way in employment gains, adding 184,000 jobs in March, though it too was down from 192,000 in February.
The ADP report showed that professional/business services contributed 40,000 jobs in March, up from February’s 34,000. Expansion in trade/transportation/utilities grew by 25,000, a decline from February’s 32,000, and 16,000 new jobs added in financial activities also represents a drop from last month’s 19,000.
“Job growth took a step back in March,” Mark Zandi, chief economist of Moody’s Analytics said. “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.”
The latest round of weak economic data this week may just force economists to further lower their first-quarter growth estimates, which currently range between an abysmal 0.9 and 1.4 percent annualized growth rate. Meanwhile, the government adjusted its data last week to show the economy grew at a 2.2 percent rate in the fourth quarter.
The matched sample used to develop the ADP National Employment Report was derived from ADP payroll data, which represents 411,000 U.S. clients employing nearly 24 million workers in the U.S.
