AMERICA’S private sector added just 158,000 jobs to the economy last month, according to a widely regarded survey that disappointed analysts yesterday.
Stocks across the pond were weighed down by the bearish news, with two separate data sets also coming in worse than expected for the world’s largest economy.
A leading gauge of the US service sector – the Institute for Supply Management’s (ISM) non-manufacturing index – slipped to 54.4 in March, down from 56 in February.
Scores above 50 indicate growth, yet the new figure revealed that the sector’s expansion has slowed.
The ISM report’s employment component was the lowest since November, dropping sharply to 53.3 from 57.2 in February.
Meanwhile applications for home mortgages fell by four per cent in the final full week of March, according to a separate report from the Mortgage Bankers Association.
Earlier in the day investors had already been disappointed by the latest ADP jobs report.
Many economists had expected the ADP’s findings to reveal at least 200,000 new jobs, yet the estimate (of 158,000 jobs) instead showed the slowest growth in five months.
The performance of the US jobs market could be better than March’s figure indicates, however, as the report revised up February’s jobs gain by 39,000, to 237,000.
“While softer than expected, the 191,000 average seen in the past three months of the ADP employment report is very much in line with the 203,000 three-month average seen in the Bureau of Labor Statistics (BLS) private payroll series,” commented
analyst Cooper Howes from Barclays Research.
The more closely watched official BLS nonfarm payroll report is released tomorrow.
“We continue to look for a 175,000 expansion in nonfarm payrolls and a one-tenth drop in the unemployment rate to 7.6 per cent,” Howes added.