U.S. Private Sector Job Growth Shows Continued Slowdown In March

(RTTNews) - Private sector job growth in the U.S. continued to slow in the month of March, according to a report released by payroll processor ADP on Wednesday.

ADP said private sector employment climbed by 189,000 jobs in March following a slightly upwardly revised increase of 214,000 jobs in February.

Economists had expected an increase of about 230,000 jobs compared to the addition of 212,000 jobs originally reported for the previous month.

With the continued slowdown, the pace of private sector job growth came in below 200,000 for the first time since January of last year.

Mark Zandi, chief economist of Moody's Analytics, said, "Job growth took a step back in March. The fallout from the collapse in oil prices and surge in value of the dollar is hitting the job market."

"Despite the slowdown, underlying job growth remains strong enough to reduce labor market slack," Zandi added.

ADP said the slowdown in job growth was centered in the largest companies, as businesses with 1,000 or more employees added just 12,000 jobs in March following an increase of 43,000 jobs in February.

Employment at small businesses jumped by 108,000 jobs in March, while medium-sized businesses added 62,000 jobs during the month.

The report also said employment in the service-providing sector rose by 184,000 jobs in March, down from 192,000 in February.

Employment in the goods-producing sector edged up by just 5,000 jobs in March compared to an increase of 22,000 jobs in the previous month.

The disappointing data from ADP may raise some concerns about the Labor Department's more closely watched monthly employment report, which includes both public and private sector jobs.

However, Paul Ashworth, Chief U.S. Economist at Capital Economics, said the ADP data proved to be far too pessimistic in February and wouldn't rule out a repeat of that pattern in March.

"Based on the drop back in initial jobless claims, the strength of job openings and the upbeat employment indices in the various activity surveys, we still estimate that the official figures, due out this Friday, will show that non-farm payrolls increased by 240,000 last month," Ashworth said.

The consensus estimate currently calls for employment to increase by about 247,000 jobs in March, while the unemployment rate is expected to hold steady at 5.5 percent.