US private employers add fewest number of workers in over 1 year
Print Edition
US private employers in April added the fewest number of workers in more than a year, which could heighten worries about the economy’s potential to rebound strongly from a first-quarter slump.
Private payrolls rose 169,000 last month, the ADP National Employment Report showed. That was the fewest since January 2014 and far below economists’ hopes for a gain of 200,000 jobs.
March payrolls were revised down to show 14,000 fewer jobs created than previously reported. The report jointly developed with Moody’s Analytics was released ahead of the government’s more comprehensive employment report tomorrow.
While it has a poor track record of predicting nonfarm payrolls, the ADP report poses a downside risk to economists’ hopes for nonfarm payrolls growth of 224,000 in April.
A combination of cold weather, a strong dollar, port disruptions and deep spending cuts by energy firms, held down first-quarter economic growth to a 0.2 percent annual pace.
A jump in the US trade deficit in March, however, suggests the economy actually contracted in the first three months of this year after expanding at 2.2 percent in the fourth quarter.
In a separate report yesterday, the Labor Department said nonfarm productivity fell in the first quarter as harsh winter weather weighed on output, pushing labor-related production costs to rise at their quickest pace in a year.
Productivity shrank at a 1.9 percent annual rate after dropping at a revised 2.1 pace in the fourth quarter. That was the first back-to-back fall in productivity since 2006.
Economists polled by Reuters had forecast productivity, which measures hourly output per worker, dropping at a 1.8 percent rate after falling at a previously reported 2.2 percent rate in the last quarter of 2014.
The productivity drop, which mirrored the abrupt growth slowdown in the first quarter, is likely to be temporary. Still, the trend remains weak. Productivity rose 0.6 percent from a year ago.
Despite the weather disruptions, workers put in more hours in the first quarter. Hours rose at a 1.7 percent rate.
With hours outpacing a 0.2 percent pace of decline in output, unit labor costs rose at a 5 percent rate in the first quarter.
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