Private companies added jobs in March at the slowest pace in 18 months, the payrolls company Automated Data Processing (ADP) - Get Report said, in a further sign that the labor market might be weakening as the stimulus fades from President Donald Trump's late-2017 tax cuts.
U.S. employment in the private sector increased by 129,000 jobs in March, ADP said Wednesday in a press release. That was fewer than the 165,000 estimated by economists in a survey by the data provider FactSet.
The job gains had averaged about 200,000 a month for the prior six months.
"Businesses are hiring cautiously as the economy is struggling," Mark Zandi, chief economist at Moody's Analytics, said in the press release. Moody's helps to produce the ADP report, which is derived from the Roseland, New Jersey-based company's payroll data.
In a call with reporters, Zandi said he expects growth in U.S. gross domestic product to slow to about 2% this year from 3% in 2018. The case is supported by lackluster data on retailing, the housing market and investment spending by businesses.
The ADP report covers private payrolls, and the government usually adds about 5,000-10,000 jobs per month, Zandi said, implying total labor-market growth of about 139,000 nonfarm jobs.
That would be well below the 170,000 new jobs that economists are currently estimating from a report due out Friday from the Labor Department.
"All the hard economic data are now saying pretty much the same thing, that growth has slowed sharply," Zandi said on the call.
According to the Federal Reserve, businesses over the past year have complained that they were having trouble finding qualified workers to fill open positions -- especially with the U.S. unemployment rate currently at 3.8%, close to the lowest in a half century.
But the tone may have shifted, according to Zandi, with fewer employers now looking to expand.
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