Private-Sector Job Growth Slowed in April to 169,000, ADP Says

WASHINGTON (Los Angeles Times/TNS) -

Private-sector job growth surprisingly slowed again in April, with businesses adding just 169,000 net new positions, payroll firm Automatic Data Processing Inc. said.

Economists had been expecting a gain of 205,000 jobs after a weak March. Instead, ADP downgraded the March figure to 175,000 from its initial estimate of 189,000, and reported that April was worse.

The 169,000 net new private-sector jobs were the fewest since January 2014, ADP said.

After 13 consecutive months of adding more than 200,000 jobs, the private sector has fallen below that figure for the second straight month. That’s the first time that happened since the winter of 2013-2014.

The unexpected decline in ADP’s closely watched private-sector data indicates overall job growth might disappoint again as well when the Labor Department releases its April report Friday.

“Fallout from the collapse of oil prices and the surging value of the dollar are weighing on job creation,” said Mark Zandi, chief economist at Moody’s Analytics, which assists ADP in preparing the report.

“Employment in the energy sector and manufacturing is declining,” he said. “However, this should prove temporary and job growth will re-accelerate this summer.”

Manufacturing companies reduced their payrolls by 10,000 in April after a 3,000-job decline in March. Construction was one of the few bright spots, with firms adding 23,000 net new positions, up from 21,000 the previous month.

The slowest job growth was at large companies. Firms with more than 1,000 employees added just 5,000 net new jobs, a slight improvement over the 4,000-job increase the previous month.

Economists have been expecting overall job growth to rebound strongly in April. Forecasts call for 220,000 net new jobs created after the Labor Department reported the private and public sectors added just 126,000 combined positions in March.

The unemployment rate is expected to tick down to 5.4 percent.

Economic growth is forecast to improve this spring after a weak first quarter. The economy expanded at just a 0.2 percent annual rate from January through March, as severe winter weather combined with low demand abroad caused by struggling economies in Europe and Asia and the soaring value of the dollar.

After the Commerce Department reported Tuesday that the March trade deficit was the largest since 2008, some economists predicted first-quarter growth would be revised into negative territory.

Federal Reserve policymakers are watching the labor market closely as they decide when to raise the central bank’s benchmark short-term interest rate for the first time since 2006. A rate hike could come as early as June, though many economists expect the slow first-quarter growth will delay that until September or later.