Employers Added 179,000 Jobs in April, ADP Says

Private employers in the United States added 179,000 jobs in April, while the pace of growth in the services sector unexpectedly eased in April to its lowest level since August 2010, according to economic reports released on Wednesday.

In the jobs report, the ADP Employer Services report fell short of economists’ expectations for a gain of 198,000, according to a Reuters survey. March private payrolls were revised up to an increase of 207,000 from a previously reported 201,000.

The figures come ahead of the government’s much more comprehensive labor market report on Friday, which includes both public and private sector employment.

“Certainly people will look into this and be pessimistic or cautious about Friday’s numbers,” said Tim Ghriskey, chief investment officer of Solaris Asset Management in Bedford Hills, N.Y.

“The breakdown from the release did show some strength in small and medium businesses. The weakness was actually in large businesses, and that is unusual. But certainly optimistic for a broader strengthening in employment.”

Friday’s report is expected to show a rise in overall nonfarm payrolls of 186,000 in April, based on a Reuters poll of analysts, and a gain of 200,000 in private payrolls.

Economists often refer to the ADP report to fine-tune their expectations for the payrolls numbers, though it is not always accurate in predicting the outcome. The report is jointly developed with Macroeconomic Advisers.

In other report, the Institute for Supply Management said its services index fell to 52.8 last month, from 57.3 in March. That was well below economists’ forecasts for 57.4, according to a Reuters survey.

A reading above 50 indicates expansion in the sector.

The report’s new-orders index tumbled to its lowest level since December 2009, falling to 52.7, from 64.1. The employment gauge dipped to 51.9, from 53.7.

“It’s a weak indication not only in the headline figure, but also in the worst possible place: the orders component,” said Pierre Ellis, senior economist at Decision Economics. “This is a sector that is supposed to be relatively smooth in terms of growth so if it turns out to be more than transitory, this would be a clear indication of destabilization in the economy.”

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