U.S. Private Employment Unexpectedly Increases in April, ADP Says
08:41 04/30 (CEP News) – Private non-agricultural employment in the United States increased by 10k jobs in April, according to a report from Automatic Data Processing Inc. released on Wednesday morning.
The figure was well above economists' expectations for a pullback of 60k jobs. All economists surveyed prior to the release were expecting a decline of at least 20k jobs.The previous month's 8k gain was downwardly revised to a 3k gain.The ADP report runs in contrast to expectations for Friday's nonfarm payrolls report from the Bureau of Labor Statistics, the benchmark employment figure for the United States.Millan Mulraine, economics strategist at TD Securities, said, "the report is pointing to a +30K print on the the nonfarm payrolls on Friday, which is at odds with the market consensus for a -75K print. Moreover, it is important to note that the performance of this indicator in predicting the actual non-farm payroll has been poor recently and we continue to cite the downside risks to Friday's number."The service providing sector was responsible for a 64k increase in employment while employment in the goods producing sector fell 54k and manufacturing pulled back 24k. In the March report, the service sector had risen by 85k while goods producing jobs fell 77k and manufacturing employment pulled back 58k jobs.Joel Prakken, chairman of Macroeconomic Advisors, said, "Though April's estimate for a small increase in employment is above consensus forecasts of an outright decline, it nevertheless suggests that a sharp deceleration of employment continues."ADP also said that employment in the construction sector declined 28k in April, marking the 18th consecutive monthly decline following March's 22k fall."This is still easily enough to keep the unemployment rate heading higher," said Ian Shepherdson, chief U.S. economist at High Frequency Economics. "More broadly, note that the ADP survey is volatile from month-to-month. The three-month average is a better guide to the trend than the monthly numbers, and it has now dropped to -2K. As recently as January, it stood at 115K." The report also said that large businesses saw declines of 18k employees while small business employment rose 42k and medium-sized firms fell 14k.In the revised March figures, large businesses fell by 53k, small businesses saw an advance of 53k jobs, and medium businesses grew by 3k jobs.Ahead of the release, Paul Mendalson, chief investment strategist from Windham Financial Services, said that although the ADP employment data continues to "miss" expectations for nonfarm payrolls, it was going to be important this time around."The market seems to continue (responding) to both but the market responds to the employment number more," he said. "People try to figure out from the ADP what Friday's numbers will be like. Right now, the market is anticipating a job loss of between 75,000 and 78,000."The ADP employment report is used to forecast nonfarm payrolls in the United States, which is scheduled for release on May 2. Prior to the release of the ADP figures, the consensus forecast was for a decline of 75k jobs in the BLS' figures.By Patrick McGee, prmcgee@economicnews.ca, edited by Nancy Girgis, ngirgis@economicnews.ca
The figure was well above economists' expectations for a pullback of 60k jobs. All economists surveyed prior to the release were expecting a decline of at least 20k jobs.The previous month's 8k gain was downwardly revised to a 3k gain.The ADP report runs in contrast to expectations for Friday's nonfarm payrolls report from the Bureau of Labor Statistics, the benchmark employment figure for the United States.Millan Mulraine, economics strategist at TD Securities, said, "the report is pointing to a +30K print on the the nonfarm payrolls on Friday, which is at odds with the market consensus for a -75K print. Moreover, it is important to note that the performance of this indicator in predicting the actual non-farm payroll has been poor recently and we continue to cite the downside risks to Friday's number."The service providing sector was responsible for a 64k increase in employment while employment in the goods producing sector fell 54k and manufacturing pulled back 24k. In the March report, the service sector had risen by 85k while goods producing jobs fell 77k and manufacturing employment pulled back 58k jobs.Joel Prakken, chairman of Macroeconomic Advisors, said, "Though April's estimate for a small increase in employment is above consensus forecasts of an outright decline, it nevertheless suggests that a sharp deceleration of employment continues."ADP also said that employment in the construction sector declined 28k in April, marking the 18th consecutive monthly decline following March's 22k fall."This is still easily enough to keep the unemployment rate heading higher," said Ian Shepherdson, chief U.S. economist at High Frequency Economics. "More broadly, note that the ADP survey is volatile from month-to-month. The three-month average is a better guide to the trend than the monthly numbers, and it has now dropped to -2K. As recently as January, it stood at 115K." The report also said that large businesses saw declines of 18k employees while small business employment rose 42k and medium-sized firms fell 14k.In the revised March figures, large businesses fell by 53k, small businesses saw an advance of 53k jobs, and medium businesses grew by 3k jobs.Ahead of the release, Paul Mendalson, chief investment strategist from Windham Financial Services, said that although the ADP employment data continues to "miss" expectations for nonfarm payrolls, it was going to be important this time around."The market seems to continue (responding) to both but the market responds to the employment number more," he said. "People try to figure out from the ADP what Friday's numbers will be like. Right now, the market is anticipating a job loss of between 75,000 and 78,000."The ADP employment report is used to forecast nonfarm payrolls in the United States, which is scheduled for release on May 2. Prior to the release of the ADP figures, the consensus forecast was for a decline of 75k jobs in the BLS' figures.By Patrick McGee, prmcgee@economicnews.ca, edited by Nancy Girgis, ngirgis@economicnews.ca
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