Private Jobs Growth Slowed In April, ADP Says

May 4, 2011

NPR Staff and Wires

Private-sector employers added 179,000 jobs in April, according to payroll processing firm ADP. That's lower than the 195,000 analysts had expected and the 207,000 private jobs ADP says were created in March. The firm's report can provide insights into the government's monthly jobs report, which is due out Friday.

According to ADP, the April data "shows that labor market conditions continued to improve in April, but only at a moderate pace.

"While employment accelerated sharply around the turn of the year, the monthly gains have been holding fairly steady around 200,000 since then," ADP said Wednesday. That growth pace indicates the unemployment rate won't fall much, it said.

Service-sector jobs increased by 138,000 last month, and goods-producing jobs were up 41,000, according to ADP's estimates. Construction jobs increased by 9,000 in April. That sector has lost more than 2 million jobs since its peak in 2007, the firm said.

Economists predict Friday's jobs report from the Labor Department will show that non-farm payrolls rose 190,000 in April, compared with an increase of 216,000 workers a month earlier, according to a Bloomberg News survey. Economists surveyed said the April unemployment rate was probably unchanged at 8.8 percent.

Service Sector Growth Slows

A separate report Wednesday said the U.S. economy's service sector grew last month at the slowest pace since August, renewing concerns that more expensive gas and food may be weakening growth.

Companies that employ 90 percent of America's work force still expanded for the 17th straight month. But their growth slowed considerably because of a sharp drop in demand for their services, the Institute for Supply Management said Wednesday.

The private trade group of purchasing executives said its index of service-sector activity dropped to 52.8 last month. That's down from 57.3 in March and a five-year high of 59.7 in February. Any reading over 50 indicates expansion.

The trade group measures activity for a range of industries, including retail, health care, financial services and construction. The index plummeted to 37.6 in November 2008, at the height of the financial crisis. The sector contracted for all but three months in 2009.

An index of new orders plummeted to its lowest level since December 2009. Many companies expressed concerns about rising gas and other commodity prices.

A measure of employment fell for the second straight month.

Paul Ashworth, an economist at Capital Economics, said the report suggests that economic growth will remain sluggish in the current April-June quarter. Growth slowed to a 1.8 percent pace in the first three months of this year.

Material from The Associated Press was used in this story.