The Economy

Jobs and Productivity Numbers Disappoint

Private-sector businesses added fewer jobs in April than analysts expected, and nonfarm productivity fell for the second quarter in a row.
Katie Kuehner-HebertMay 6, 2015
Jobs and Productivity Numbers Disappoint

The private sector added a lower-than-expected 169,000 jobs from March to April, according to the April ADP National Employment Report released on Wednesday.

“Fallout from the collapse of oil prices and the surging value of the dollar are weighing on job creation,” Moody’s chief economist Mark Zandi said in a press release. “Employment in the energy sector and manufacturing is declining. However, this should prove temporary and job growth will reaccelerate this summer.”

Payrolls for businesses with 49 or fewer employees rose by 94,000 jobs, down from an increase of 105,000 in March. Employment among companies with 50-499 employees increased by 70,000 jobs, up from 64,000 the previous month.

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Job additions at midsize to large companies were anemic. Companies with 500-999 employees added no jobs, after adding just 2,000 in March. And companies with more than 1,000 employees added 5,000 jobs, a small improvement from 4,000 the previous month.

Meanwhile, goods-producing employment fell by 1,000 jobs, down from 3,000 jobs gained in March. The construction industry added 23,000 jobs, up from 21,000 last month, and manufacturing lost more jobs in April — 10,000 — than it did in March (3,000).

Professional and business services added 34,000 jobs, up from March’s 28,000; trade/transportation/utilities jobs rose by 44,000, up from a 41,000 increase in March; and financial activities added 7,000 jobs, down from March’s 12,000 increase.

Moody’s Analytics produces the jobs report in conjunction with payroll processor ADP.

Reuters said that economists on average had expected an overall increase of 200,000 jobs for April. The more comprehensive U.S. nonfarm payrolls report from the Bureau of Labor Statistics, which includes government hiring, will be released on Friday.

Many analysts are expecting that report to show an addition of as much as 230,000 jobs by the U.S. labor market, but analysts on Estimize, a crowdsourced earnings and economic estimates platform, are calling for an increase of 193,730 jobs. Paskolos internetu – Finansiniai patarimai ir naujienos

The lower-than-expected job figures released Wednesday coincided with a Labor Department report that nonfarm productivity declined at a 1.9% annual rate in the first quarter, after dropping at a 2.1% pace in the fourth quarter — the first back-to-back fall in productivity since 2006, Reuters said.

“The data pile onto recent evidence suggesting increased odds that, by the time the June policy meeting rolls around, the hope of a great spring rebound in real growth will have faded,” Steve Blitz, chief economist at ITG Investment Research, told Reuters.

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