March saw less private sector jobs created than expected with 129,000 new jobs compared to 170,000 expected according to Wednesday’s ADP report. The previous month’s reading was revised upward to 197,000 from 183,000.
Key Takeaways
- Private sector employment projections were off by 41,000 jobs.
- March saw the slowest employment growth in almost two years.
- The goods producing sector in particular showed signs of weakness.
The job market may be weakening as employment begins to slow across the majority of industries in large, small, and mid-sized businesses. Hiring is softening as the effects of the $1.5 trillion tax cut begin to fade in the midst of trade protectionism.
While the jobs market is very tight and some growth is attributable to a lack of skilled workers for available positions, further weakness in employment growth will cause the unemployment level to rise.
March saw the lowest rate of growth in 18 months, slightly offset by an upward revision of the previous month’s data.
Categories
The gains came solely from the services sector which rose by 135,000 jobs. Goods-producing industries lost 6,000 positions, as did construction. Manufacturing declined by 2,000, offset by a 2,000 rise in natural resources and manufacturing.
Health and education services rose by 56,000 and professional and business services increased by 41,000. Leisure and hospitality reported a 13,000 increase, information services grew by 11,000, and trade, transportation and utilities sank by 9,000. Financial activities dropped 1,000.
Expert Outlook
“The job market is weakening, with employment gains slowing significantly across most industries and company sizes,” said Moody Analytics’ Mark Zandi.
“Businesses are hiring cautiously as the economy is struggling with fading fiscal stimulus, the trade uncertainty, and the lagged impact of Fed tightening. If employment growth weakens much further, unemployment will begin to rise.”
In a conference call, Zandi added that trade war uncertainty in particular is a contributing factor.
“The widespread expectation is that the Trump administration and the Chinese will come to terms here and get a deal and this trade war will end. But until it does, the uncertainty created by the conflict is weighing heavily on the collective psyche.”
U.S. firms post weakest job growth in 18 months, ADP says https://t.co/qAQOTqRHBH pic.twitter.com/zkXeXqL17y
— Crain's Cleveland (@CrainsCleveland) April 3, 2019
Market Reaction
Gold ticked upward slightly following the news before correcting itself, now trading down -0.01% at $1,289.83/oz with a high of $1,294.14/oz and a low of $1,288.62/oz.
Gold Price Chart
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