News on the job front this morning leaned towards the modestly disappointing side.
Softness in job growth is now apparent. That being said, adding +119K jobs is in line with a muddle through +2% real GDP growth pace.
What about the market’s expectations? Consensus forecasted +150K job adds from APD this morning. The same forecasters expect the Federal government to report a gain of +135K jobs on Friday. In the face of the miss, major stock indexes were down this morning before the open.
Service-providing jobs increased by +113,000, the weakest pace of growth in seven months. Goods-producing employment rose by +6,000 jobs in April, its slowest pace of growth in seven months.
In the press release from ADP, Mark Zandi, chief economist of Moody’s Analytics, was given this quote,
“Job growth appears to be slowing in response to very significant fiscal headwinds. Tax increases and government spending cuts are beginning to hit the job market. Job growth has slowed across all industries and most significantly among companies that employ between 20 and 499 workers.”
I do not agree with Mark Zandi’s statement.
Globally exposed industry groups are being hurt the worst.
Look at the evidence: In goods production, manufacturers showed job losses. They are globally exposed. In services, the globally exposed sector is trade, transport, and utilities. This industry’s April monthly job add number was relatively weak.
Domestically, construction firm employment bounced back, the finance sector continued to plod along, and profession/business services added a decent amount of jobs.
Here is the data ADP provided…
Total ADP U.S. Nonfarm Private Employment: +119,000
By Company Size:
Small businesses: +50,000 1-50 employees
Medium businesses: +26,000 50-499 employees
Large businesses: +43,000 500-999 employees and 1,000+ employees
+113,000 Service providing
+6,000 Goods producing
+20,000 Professional/business services
+7,000 Financial activities
What was your take on this key report?
Please go ahead and join the debate on Real Time Insight today.