ADP Report Shows Slight Jobs Gain
Updated from 11:19 a.m. EDT
Employment growth ground to a halt this month after losing 18,000 jobs last month, according to the latest
ADP
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report.
The economy took on a paltry 8,000 jobs in March. Employment growth has averaged 99,000 jobs per month since the survey began in May 2006.
The report comes as
Federal Reserve
Chairman Ben Bernanke told the Joint Economic Committee that he expects the unemployment rate to rise over the next few months.
But the report isn't all bad news, says Joel Prakken, chairman of Macroeconomic Advisers LLC, the group that developed and maintains the ADP report. Today's employment number joins a growing number of indicators that don't indicate robust growth, but may signal a bottoming out, he says.
Unlike last month's widespread employment losses, this month's declines were concentrated in large businesses and in the goods-producing sector. Businesses with 500 or more workers lost 52,000 jobs, while businesses with fewer than 50 employees added 55,000.
Consistent with long-term trends, the goods-producing sector lost 77,000 while service sector employment grew 85,000.
The concentrated employment loss -- and growth -- may be a hopeful sign. This month there isn't the same "sense of uniform weakness" as last month, says Prakken.
The ongoing losses in manufacturing jobs are consistent with other indicators. The
announced last week that new orders for manufactured durable goods decreased 1.7% in February, the second straight month of declines. The manufacturing sector saw its weakest quarterly growth in almost five years, according to a report released yesterday by the Institute for Supply Management.
Prakken notes that the 8,000 jobs gained were slightly above expectations. But expectations are based on the Bureau of Labor Statistics' establishment survey, which
often differs significantly from ADP's report
. The BLS' numbers, which will be released on Friday, may be lower than ADP's this month because of a difference in the way they count striking workers, says Prakken.
If the overall job market has hit a low point, consumers don't seem to be feeling it. Consumers also became more pessimistic about the state of the economy in February: 25.4% expected business conditions to worsen over the next six months, a 3.8 percentage point jump from the month before, according to the Conference Board's consumer-confidence index.
Last month's numbers were revised up 5,000.
The ADP National Employment report measures nonfarm private employment using payroll data from about 392,000 of ADP's U.S. clients, who work in all 19 major North American Industrial Classification private industrial sectors.
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