Job growth hit an 18-month low in March as signs the hiring boom is running out of steam continue to grow, according to a report Wednesday from ADP and Moody’s Analytics.
Private payrolls increased just 129,000 for the month, far below the 173,000 economists surveyed by Dow Jones had predicted. The bad news was offset somewhat by higher revisions for February’s job gains, which rose from 183,000 to 197,000.
In all, March was the worst month for job creation since September of 2017, when there were just 111,000 new jobs.
Per CNBC:
“The job market is weakening, with employment gains slowing significantly across most industries and company sizes,” Mark Zandi, chief economist at Moody’s Analytics, said in a statement. “Businesses are hiring cautiously as the economy is struggling with fading fiscal stimulus, the trade uncertainty, and the lagged impact of Fed tightening. If employment growth weakens much further, unemployment will begin to rise.”
All of the gains came from services, which increased 135,000, while goods-producing industries lost 6,000 positions. A decline of 6,000 in construction and 2,000 in manufacturing was offset a bit by a 2,000-job increase in natural resources and mining.
On the plus side, education and health services saw an increase of 56,000 while professional and business services added 41,000. Leisure and hospitality grew by 13,000 while information services increased by 11,000 and trade, transportation and utilities contributed 9,000. Financial activities saw a drop of 1,000.
The disappointing number comes as Wall Street is watching the jobs market closely for signs of an economic slowdown. The Labor Department’s nonfarm payrolls count is released Friday, with economists looking for growth of 175,000 after February’s weak 20,000 reading.
Zandi, who said he expects the government count to be closer to 140,000, attributed much of the jobs issues to weakening business sentiment fueled in part by the U.S.-China trade dispute.
“The widespread expectation is that the Trump administration and the Chinese will come to terms here and get a deal and this trade war will end. But until it does, the uncertainty created by the conflict is weighing heavily on the collective psyche,” Zandi said in a conference call.
ADP and the government counts often conflict, as evidenced by the 177,000 disparity in the February total.
Small businesses, which have been a major growth engine for hiring, struggled in March with just 6,000 net new hires, according to the ADP/Moody’s report. The biggest gains game from firms with between 50 and 499 employees, which grew by 63,000, while large companies added 60,000.
