New jobs numbers raise concerns about economy’s strength
Though the Dow Jones industrial average posted a four-year high on Tuesday, the market index fell as much as 45 points early Wednesday morning, reacting to a report from Automatic Data Processing Inc. (ADP) that showed that private-sector job growth did not increase to the level forecasters expected.
Forecasters expected ADP to report an increase of 177,000 private sector jobs in April, according to Reuters, but actual data released Wednesday showed numbers only increased by 119,000. Jobs had increased steadily from last May through February, with an increase of 240,000, but dropped down to 120,000 last month, according to the Bureau of Labor Statistics. April’s official job numbers, including public hiring, will be released on Friday and are forecast to show an increase of 169,000, according to Reuters.
After seven months of increases, manufacturing jobs decreased by 5,000 in April, but financial jobs rose by13,000.
Though the weaker-than-expected job numbers may raise concerns about the strength of the U.S. economy, some experts cautioned about reading too much into the report, saying ADP hasn’t been very accurate in the past.
“For what it’s worth, the first print of ADP … has had some big misses in recent months in either direction compared to the first print of private payrolls. For instance, ADP overshot by 88,000 in March, undershot by 87,000 in January and overshot by 113,000 in December,” said Jonathan Basile, director of economics at Credit Suisse, in an interview with Reuters.
Private employment at small businesses remained steady in April, increasing by 58,000, according to ADP.