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

(RTTNews) - In another sign of sluggishness in the U.S. labor market, payroll processor ADP released a report Wednesday morning showing that private sector employment increased by much less than expected in the month of April.

ADP said employment in the private sector increased by 169,000 jobs in April compared to a downwardly revised increase of 175,000 jobs in March.

Economists had expected private sector employment to climb by about 200,000 jobs compared to the addition of 189,000 jobs originally reported for the previous month.

With the continued slowdown, the pace of private sector job growth came in below the key 200,000 level for the second consecutive month.

Mark Zandi, chief economist of Moody's Analytics, said, "Fallout from the collapse of oil prices and the surging value of the dollar are weighing on job creation."

"Employment in the energy sector and manufacturing is declining," he added. "However, this should prove temporary and job growth will reaccelerate this summer."

The report said employment in the service-providing sector rose by 170,000 jobs in April, while employment in the goods-producing sector edged down by 1,000 jobs.

ADP also said large businesses added just 5,000 jobs, while employment at small and medium-sized businesses rose by 94,000 jobs and 70,000 jobs, respectively.

The weaker than expected data may point to some downside risk for the Labor Department's monthly jobs report, which includes both private and public sector jobs.

The Labor Department report due on Friday is currently expected to show an increase of about 220,000 jobs in April compared to the increase of 126,000 jobs in March.

Despite the disappointing ADP data, Paul Ashworth, Chief U.S. Economist at Capital Economics, said most other labor market indicators suggest Friday's report will show much healthier job growth.