December 13, 2019

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

I.S.M. Services Sector Index Shows Slower Growth

WASHINGTON (AP) — Two reports showed Wednesday that American service companies grew more slowly in March and private employers pulled back on hiring. The declines suggest businesses may have grown more cautious last month after federal spending cuts took effect.

The Institute for Supply Management said that its index of nonmanufacturing activity fell to 54.4 last month. That is down from 56 in February and the lowest in seven months. Any reading above 50 signals expansion.

Slower hiring and a steep drop in new orders drove the index down. A gauge of hiring fell 3.9 points to 53.3, the lowest since November. That means companies kept hiring, just at a slower pace.

The group’s report covers companies that employ roughly 90 percent of the work force. It measures growth in industries that include retailing, construction, health care and financial services.

A separate report from the payroll processor ADP also pointed to slightly weaker hiring in March. ADP said private employers added 158,000 jobs in March, down from 237,000 the previous month. Construction companies did not add any jobs after three months of solid gains.

Economists were not overly concerned with the weaker reports. Several noted that ADP’s figures were less reliable than the government’s more comprehensive employment report, which comes out on Friday.

Still, many say the pace of hiring has probably dropped off from the previous four months, when employers added an average of 200,000 net jobs a month. And a few reduced their forecasts for March job growth after seeing the two reports.

Jim O’Sullivan, chief United States economist at High Frequency Economics, now expects just 160,000 net jobs in the March employment report, instead of 215,000. Jennifer Lee, an economist at BMO Capital Markets, said her group had lowered its forecast to 155,000, from 220,000.

Ms. Lee said businesses might have temporarily suspended hiring because they wanted to see the impact of $85 billion in government spending cuts, which began on March 1.

Still, most economists say any slowdown is likely to be temporary. Most say growth accelerated in the January-to-March quarter to a 3 percent annual rate, buoyed by a resilient consumer and a steady rebound in housing.

And even if growth slows in the April-to-June period to roughly 2 percent, as some predict, that would still leave the economy expanding at a solid pace in the first half of the year.

“For now, there is still a lot of good news on the economy,” said Paul Edelstein, an economist at IHS Global Insight. “Home construction and demand are growing, and jobs are being added.”

Article source: http://www.nytimes.com/2013/04/04/business/economy/survey-shows-158000-new-jobs-in-march.html?partner=rss&emc=rss