Automated Data Processing (ADP) said that nonfarm payroll growth was week in April, up just 119,000 for the month. This was the slowest pace of hiring since September. In the manufacturing sector, employment growth turned negative for the sixth time in the past 10 months. This is consistent with other recent surveys which have found manufacturing activity slowing down in April, with hiring remaining skittish. To illustrate just how soft the employment market is for manufacturers, there were 6,000 fewer net new employees in the sector year-over-year, according to ADP.
Note that data on net job gains from ADP differ somewhat from the official government data provided by the Bureau of Labor Statistics (BLS). As noted in the last BLS report, manufacturing added 77,000 net new workers from March 2012 to March 2013. This was higher than the ADP estimate. With that said, there is definitely one similarity: manufacturing hiring remains well below its potential, with just 4 percent of the net new jobs created in the past 12 months coming from the sector.
New data on April employment will come out on Friday, with a consensus estimate of 150,000 nonfarm payroll workers being added and manufacturing job growth expected to be weak at best.
Looking specifically at the ADP report, the service-providing sectors added 113,000 of the net new workers in the month, or all but 6,000 of them. Small and medium-sized businesses (e.g., those with less than 500 employees) accounted for 64 percent of the net new jobs added in April. Sectors with positive job growth in the month included trade, transportation, and utilities (up 29,000); professional and business services (up 20,000); construction (up 15,000); and financial activities (up 7,000).
Chad Moutray is chief economist, National Association of Manufacturers.
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