ADP Report Surprises Economists by Showing Decline
A discouraging report from ADP this morning tossed some cold water on Wall Street’s cheerful rally of the last few weeks. The monthly ADP National Employment Report says 23,000 private, nonfarm jobs were lost in the last month.
The same report also adjusted the previous month’s job loss from 20,000 to 24,000.
Economists had been predicting that the report would show job growth, not loss. Marketwatch put the estimate at 40,000, while a Dow Jones Newswire survey put the job growth at 50,000. So not only was the ADP report a surprise, but the size of the difference from the estimates was particularly troubling.
However, the job loss was the lowest in two years, confirming that there is improvement in the U.S. economy, even if it isn’t bouncing back as robustly as many are hoping.
The ADP report comes two days before the U.S. Bureau of Labor Statistics releases its numbers on jobs and unemployment. Before today’s ADP report, economist surveys all pointed to optimistic job growth in March. A Bloomberg survey predicted the BLS report will show the economy added 184,000 jobs.
So far, the optimism is still holding. The BLS numbers will include the hiring of thousands of census workers. ADP does not count government jobs. The BLS is also coming off a weather-impacted February, which affects the government employment count much more than it does ADP’s, because of differences in methodology.
In the past 12 months, ADP numbers have differed from the official BLS report by as many as 189,000 jobs. The average over the last 12 months is closer to 18,000.
The Conference Board, which tracks job openings posted online, said today there were 29,600 fewer jobs online in March than in the month before. The difference is so small, The Conference Board said, “Labor demand was essentially unchanged.”
Still, the decline is the second in a row for the Help Wanted Online Data Series. In February, the decline in posted jobs was 66,900. It followed three months of triple-digit increases in the posted jobs.
Another report today, this one the Chicago Purchasing Managers Index, dropped 6.1 percent to 58.8 in March from February’s 62.6 reading. Economists had been expecting the index would come in at 61.
The Purchasing Managers Index measures regional goods purchasing activity. As such, it’s one of several indices that are considered cumulatively by economists and Wall Street in divining how the economy is doing.
But coming on the heels of the ADP jobs report and Tuesday’s Standard & Poor’s Case-Shiller Index, which suggested housing prices were flattening out, it’s not a surprise that stock buyers were not in a mood to bid up prices.
Offsetting what might have been an even bigger decline than the day’s 50-point decline was Tuesday’s rebound in the Consumer Confidence Index. After nosediving 10 points from January to February, the Index was up six points to 52.5 in March.
It was at least something positive, even though The Conference Board’s Consumer Research Center Director Lynn Franco cautioned, “Consumers continue to express concern about current business and labor market conditions. And, their outlook for the next six months is still rather pessimistic. Overall, consumer confidence levels have not changed significantly since last spring.”
The U.S. Labor Department will release its March report Friday at 8:30 a.m. EDT. At 9:30 a.m. EDT, it will host a live web chat with BLS experts. Anyone can participate and ask questions about the national employment and unemployment data. The focus of the chat will be on the March report.
Original post created by: ERE Articles