NEW YORK, April 3 U.S. companies hired at the
slowest pace in five months in March as recent strong demand for
construction jobs evaporated, a report by a payrolls processor
showed on Wednesday.
The ADP National Employment Report said private employers
added 158,000 jobs last month, falling short of economists'
expectations for 200,000. The report came in below the lowest
estimates in a poll by Reuters and was the smallest gain since
Revisions to February's jobs gains were more positive, with
the private payrolls figure raised to an increase of 237,000
from the previously reported 198,000, although January was
revised down to 177,000 from 215,000.
March's pullback was largely due to construction jobs
flatlining after showing strength in recent months, said Mark
Zandi, chief economist for Moody's Analytics. There were zero
new construction jobs in March.
Recent monthly gains in the sector have averaged about
35,000, Zandi said, as the housing recovery has gained traction.
Hiring may also have been boosted in the short-term by
rebuilding efforts following the massive storm that hit the U.S.
northeast in the fall of last year, he said.
"If that's the case, underlying job growth is not changed
appreciably," said Zandi, estimating overall employment growth
is running at around 175,000 a month.
Small businesses led March's employment gains as companies
with less than 50 employees added 74,000 jobs. Companies with
less than 500 employees created 37,000 positions, while larger
firms with more than 500 people on their payrolls added 47,000
The ADP report, which is jointly developed with Moody's
Analytics, comes ahead of the government's more comprehensive
labor market report on Friday.
That report includes both public and private sector
employment and is expected to show a gain in overall nonfarm
payrolls of 200,000 last month, while the unemployment rate is
seen holding steady at 7.7 percent.
Economists said the ADP report could add some downside risk
to their forecasts for Friday's number, though ADP is not always
accurate in predicting the outcome.
"It tilts the risk in that (weaker) direction for Friday's
payroll numbers," Jim O'Sullivan, chief U.S. economist at High
Frequency Economics in Valhalla, New York, said of the ADP
"It doesn't mean the trend of job growth has suddenly
slowed, but that's what people are worried about."