January 29, 2020

Business Hiring Slipped to 7-Month Low in April

Businesses added 119,000 employees to payrolls last month, according to the ADP National Employment Report released on Wednesday, short of economists’ expectations for 150,000 jobs and the smallest gain since last September.

The slowdown in hiring was caused primarily by a combination of increased payroll taxes at the start of the year and the $85 billion in government spending cuts that took effect across the board in March, said Mark Zandi, chief economist at Moody’s Analytics, which jointly developed the hiring report with ADP, a payroll processor.

“They are starting to bite and starting to weaken growth,” Mr. Zandi said. “It’s affecting all industries and almost all company sizes.”

The Federal Reserve also expressed its concern about economic growth on Wednesday and said it would continue to pursue its stimulus campaign, although it was ready to increase or decrease its efforts depending on the economy’s performance.

After accelerating in the first quarter, recent data suggested that overall economic growth cooled heading into the second quarter.

Two separate reports on manufacturing also showed employment slowed in April. Analysts said there was some risk that the federal April employment report on Friday could be disappointing.

Markit, a financial data firm, said its final Manufacturing Purchasing Managers Index slipped to 52.1 from 54.6 in March. It was the lowest reading since October.

That was echoed by a separate report from the Institute for Supply Management that showed the sector expanded only modestly, with its index coming in at 50.7, down from 51.3. Readings above 50 indicate expansion.

Regional reports also showed a slowdown in factory activity in April in some areas while some, including the Midwest, fell into contraction.

Another report showed construction spending fell 1.7 percent to an annual rate of $856.72 billion, the lowest since August, according to the Commerce Department. The drop could cause the first-quarter economic growth estimate to be trimmed from a first reading of 2.5 percent.

Economists expect Friday’s employment report from the Labor Department to show that overall nonfarm payrolls increased by 145,000, an improvement over the paltry 88,000 seen in March. Private payrolls are expected to have risen by 160,000.

Article source: http://www.nytimes.com/2013/05/02/business/economy/business-hiring-slipped-to-7-month-low-in-april.html?partner=rss&emc=rss

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