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First Cut: ADP National Employment Report points to slower hiring in March

The ADP National Employment Report for March indicated that private payrolls were up 129,000 overall after up 197,000 in February (previously 183,000). Hiring among goods producers fell 6,000 while service providers added 135,000 workers. The dip for goods producers should not be of too much concern. There was very little change for manufacturing at down 2,000 and it remains at consistently high levels. Construction was down 6,000, but this followed on two months of solid hiring and may simply be that the weather was not conducive to hiring for outdoor work.

Markets will find the total somewhat disappointing, but should also be cautious in that the ADP numbers can miss substantially from the BLS estimates. Nonetheless, given the maturity of the labor market and the downtick in economic activity in the first quarter, a slower reading is to be expected. It may also be that businesses are having trouble finding workers to fill open slots. Should the 129,000 for private payrolls hold up when the government data is released at 8:30 ET on Friday, April 6, it is still a level more than sufficient to absorb new workers coming into the labor market.

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