According to ADP, the pace of private sector hiring was anemic, totaling only 38k, well below expectations of 175k and down from 177k in April. The large drag was in the goods producing sector which shed 10k jobs led by manufacturing, the area around the world that has seen clear softening. There is no question though that the Japanese earthquake likely is a main catalyst for the slowdown but there is certainly a concerted effort in Asia to moderate growth and certain areas of Europe have their own issues. All of the job losses in the goods producing category were in large companies as small and medium sized businesses added jobs. Even taking out mfr’g, the service sector only added 48k jobs, down from a gain of 141k in April and 165k in Mar as large companies had no net job gains. Friday’s Payroll figure is expected to rise 180k with a private sector gain of 209k and its highly likely that economists reduce those estimates after today’s ADP report. Bottom line, I mentioned Japan as a catalyst for the weakness but there is clearly something else going on to account for the softness now in a variety of economic data points.
ADP says job adds punk
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