By Kathleen Madigan
Private businesses in March added far fewer employees than
expected by economists, according to a tally of private-sector
hiring released Wednesday. The undershoot may temper investor
expectations for government's payrolls data to be reported
Friday.
Private-sector jobs in the U.S. increased by 158,000 last month,
according to a national employment report calculated by payroll
processor Automatic Data Processing Inc. (ADP) and forecasting firm
Moody's Analytics.
Economists surveyed by Dow Jones Newswires expected ADP to
report a gain of 192,000 private jobs. However, the February job
gain was revised up significantly to 237,000 from 198,000 reported
a month ago.
According to ADP, firms employing between 1-49 workers increased
jobs by 74,000 in March. Medium-sized businesses with payrolls of
50-499 workers hired 37,000 new employees. Large firms, businesses
with 500 or more employees, added 47,000 positions.
Service-sector jobs increased by 151,000 in March, and factory
jobs filled just 6,000 positions.
ADP reports its tally of private sector hiring ahead of the
Bureau of Labor Statistics' employment situation report. The BLS
report counts both private and government payroll slots.
The median forecast of economists calls for nonfarm payrolls to
increase 200,000. Although the ADP report came in below
expectations, past ADP reports have missed the payrolls number by a
wide margin. As a result, most economists probably will not change
their forecasts significantly if at all.
Investors, however, are focused on labor-market conditions to
divine the next policy move by the Federal Reserve. The
weaker-than-expected ADP report suggests the Fed is unlikely to
contemplate pulling back on accommodation anytime soon.
ADP, of Roseland, N.J., offers payroll processing, human
resource and benefit-adminstration services to about 600,000
clients world-wide. Economics firm Moody's Analytics is a
subsidiary of Moody's Corporation.
Two other job-related releases gave estimated job gains for
March, one close to the ADP number.
TrimTabs Investment Research projected only 156,000 jobs were
added in March. TrimTabs analyzes daily income tax deposits to the
U.S. Treasury to derive its jobs estimate.
TrimTabs said its gauge suggests the U.S. economy is not
creating enough new jobs to bring down the unemployment rate.
On Tuesday, job-listing website Bright.com estimated 223,000 new
jobs were created in March.
"Although the sequester will marginally impact growth in
government-contract job markets, the overall labor market shows
signs of improvement month over month," the Bright.com report
said.
Write to Kathleen Madigan at kathleen.madigan@dowjones.com