The numbers: Employers hired 129,000 workers in March, payroll processor ADP said Wednesday. That was the weakest showing in 18 months and missed the consensus among economists surveyed by Econoday for job gains of 165,000.
What happened: “The job market is weakening,” Moody’s Analytics Chief Economist Mark Zandi said. Still, February figures were raised by 14,000 jobs.
In March, small businesses added just 6,000 jobs, medium-size firms added 63,000, and large employers hired 60,000 workers. All of the gains were in the service sectors: goods-producers lost 6,000 jobs.
“The economy is struggling with fading fiscal stimulus, the trade uncertainty, and the lagged impact of Fed tightening,” Zandi added. “If employment growth weakens much further, unemployment will begin to rise.”
Big picture: “While we believe the ADP employment report holds limited value for forecasting the BLS nonfarm payrolls report, we find that large ADP surprises vs. consensus forecasts are directionally correlated with nonfarm payroll surprises,” said economists at Goldman Sachs in a note released before the ADP data.
The MarketWatch consensus forecast for the Labor Department’s more closely followed employment report to be released Friday is for a gain of 179,000 jobs.
Market reaction: Futures for the Dow Jones Industrial Average
and the S&P 500 index
were rising ahead of the labor report and held on to those solid gains afterward.