US pri­vate sec­tor adds jobs; planned lay­offs fall

nPri­vate

The Financial Daily - - ECONOMY & CONTINUATION -

em­ploy­ers add 201,000 jobs in March

NEW YORK: US pri­vate em­ploy­ers added more than 200,000 jobs in March while planned lay­offs fell, un­der­scor­ing ex­pec­ta­tions that mo­men­tum in the la­bor mar­ket will help un­der­pin the eco­nomic re­cov­ery.

The ADP Em­ployer Ser­vices re­port on Wed­nes­day showed that U.S. pri­vate em­ploy­ers added 201,000 jobs in March, largely in line with ex­pec­ta­tions for a gain of 203,000 jobs.

The ADP re­port, which is jointly de­vel­oped with Macroe­co­nomic Ad­vis­ers LLC, did lit­tle to change ex­pec­ta­tions of the gov­ern­ment's much more com­pre­hen­sive la­bor mar­ket re­port due out on Fri­day, which in­cludes both pub­lic and pri­vate sec­tor em­ploy­ment.

"While a touch softer than Fe­bru­ary's, this is a strong re­port that in­di­cates con­tin­ued mo­men­tum in the pace of la­bor mar­ket re­cov­ery," Bar­clays Cap­i­tal wrote in a note. Bar­clays said it was main­tain­ing its ex­pec­ta­tion for Fri­day's re­port to show an in­crease of 175,000 jobs in March.

A Reuters poll of an­a­lysts shows a me­dian fore­cast for non­farm pay­rolls to rise by about 190,000 jobs in March, with pri­vate pay­rolls fore­cast to rise by 200,000.

The slow re­cov­ery in the jobs mar­ket has been one of the big­gest hur­dles to a sus­tain­able eco­nomic re­cov­ery, but re­cent data has raised op­ti­mism that im­prove­ment in em­ploy­ment is strength­en­ing.

A sur­vey of U.S. chief ex­ec­u­tives by the Busi­ness Roundtable re­leased on Wed­nes­day un­der­scored the grow­ing op­ti­mism. More than half of the CEOs sur­veyed said they are look­ing to add jobs over the next six months and their view of the econ­omy bright­ened in the first quar­ter.

ADP said the job gains in March showed good breadth, with small busi­nesses adding 102,000 jobs and medi­um­sized and large busi­nesses gain­ing 82,000 and 17,000 jobs, re­spec­tively.

ADP also down­wardly re­vised its Fe­bru­ary's fig­ure to 208,000 from 217,000.

"It looks like the U.S. eco­nomic re­cov­ery con­tin­ues, and the im­prov­ing la­bor mar­ket should be a buf­fer against weak ar­eas like real es­tate," said David Katz, chief in­vest­ment of­fi­cer at Ma­trix As­set Ad­vi­sors in New York.

Hous­ing has re­mained out­side of the broader re­cov­ery and con­sumer sen­ti­ment has weak­ened as food and gaso­line prices jumped, adding to signs the econ­omy lost mo­men­tum in early 2011. An­a­lysts, how­ever, ex­pect the im­prov­ing la­bor mar­ket should off­set that.

Sep­a­rate data on Wed­nes­day showed ap­pli­ca­tions for U.S. home mort­gages tum­bled last week as higher in­ter­est rates sapped de­mand for loan re­fi­nanc­ing.

An­other re­port showed the num­ber of planned lay­offs at U.S. firms fell in March af­ter spik­ing up the month be­fore. Em­ploy­ers an­nounced 41,528 planned job cuts this month, down 18 per­cent from Fe­bru­ary, ac­cord­ing to the re­port from con­sul­tants Chal­lenger, Gray & Christ­mas, Inc. For de­tails, see

Over­all, 130,749 job cuts were an­nounced in the first three months of the year, the low­est rate of down­siz­ing since 1995.

How­ever, the Chal­lenger re­port said the high­est level of job re­duc­tions this year has been seen in the gov­ern­ment sec­tor. Losses are ex­pected to grow as cash-strapped state and lo­cal gov­ern­ments deal with bud­get prob­lems.

U.S. Trea­sury prices rose mod­estly im­me­di­ately af­ter the ADP re­port as traders said there was re­lief the num­ber was slightly be­low the con­sen­sus, while U.S. stocks were trad­ing higher in the late morn­ing.

Pol­i­cy­mak­ers at the Fed­eral Re­serve have ramped up de­bate on whether the econo.Reuters

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