(Adds details on reports, analyst comments, updates markets)
* U.S. private sector payrolls rise 191,000 in March
* Factory orders rebound 1.6 percent in February
* Shipments, inventories rise
By Lucia Mutikani
WASHINGTON, April 2 U.S. companies stepped up
hiring in March for a second straight month, offering fresh
evidence the economy was regaining momentum after a
weather-driven lull over the winter.
Private employers added 191,000 workers to payrolls last
month and 39,000 more were added in February than previously
believed, payrolls processor ADP said on Wednesday.
The signs of solid hiring added to a steady stream of fairly
upbeat data that suggests the economy started to accelerate as
the grip of an unusually cold winter began to loosen and helps
keep hopes alive that the U.S. economy's performance in 2014
will be its best since the recession ended almost five years
"Whatever impact the weather was having is starting to
dissipate and we are starting to see the economy gain traction,"
said Sam Bullard, a senior economist at Wells Fargo Securities
in Charlotte, North Carolina.
The report, which is jointly developed with Moody's
Analytics, was released ahead of the government's more
comprehensive report on employment on Friday.
That report is expected to show nonfarm payrolls rose by
200,000 in March, the largest gain in four months, according to
a Reuters poll of economists. The poll was taken before the ADP
data was released, but many economists said the ADP report did
not shift their views.
A separate report showed small business hiring increased for
a sixth straight month in March. The National Federation of
Independent Business said small business employment increased by
an average of 0.18 worker per firm, up from 0.11 in February.
Prices for U.S Treasury debt fell on the signs
of quickened hiring, while the dollar rose against a basket of
currencies. Stocks on Wall Street were trading
Signs of improvement in the labor market will be welcomed by
the Federal Reserve, which has been scaling back its monthly
bond-buying program in a vote of confidence in the economy.
The show of labor market strength could heighten speculation
on the timing of the U.S. central bank's first interest rate
increase. It has held benchmark overnight lending rates at a
record low of zero to 0.25 percent since December 2008.
"For the Fed, employment growth in the 200,000 to 225,000
range will be seen as good enough to justify their current bias
for tapering and a pivot towards a 2015 start to policy
tightening," said Millan Mulraine, deputy chief economist at TD
Securities in New York.
FACTORY ORDERS REBOUND
The unusually cold and snowy winter was just one factor that
hobbled the economy at the end of 2013 and the start of this
year. Growth also took a knock from businesses placing fewer
orders with manufacturers while working through a pile of unsold
goods, and from the temporary drag from the expiration of
long-term unemployment benefits and cuts to food stamps.
These factors are expected to lower growth to an annualized
pace below 2 percent in the first quarter. The economy expanded
at a 2.6 percent rate in the last three months of 2013.
Signs of an economic thaw were also evident in a separate
report from the Commerce Department that showed new orders for
manufactured goods jumped 1.6 percent in February, the biggest
rise since September.
However, January's orders were revised to show a larger 1.0
percent drop from a previously reported 0.7 percent fall.
Inventories at factories rose 0.7 percent in February, the
biggest increase since October 2011. Bullard said that was
likely because other businesses were holding the line on their
inventory, leaving a buildup at factories.
In another upbeat economic sign, shipments from factories
increased 0.9 percent, the largest rise since last July.
(Reporting by Lucia Mutikani; Additional reporting by Richard
Leong in New York; Editing by Paul Simao and James Dalgleish)