Economy Watch: ADP Reports Strong Hiring
The ADP National Employment Report, which always comes out two days before the official U.S. government unemployment numbers, said on Wednesday that the American private sector added a net of 209,000 positions in February.
By Dees Stribling, Contributing Editor
The ADP National Employment Report, which always comes out two days before the official U.S. government unemployment numbers, said on Wednesday that the American private sector added a net of 209,000 positions in February. The payroll data specialist also revised its total estimates of hiring for January and February upward to 182,000 and 230,000, respectively.
Small businesses (fewer than 50 employees) were doing much of the yeoman’s work of hiring people, according to ADP, adding a net of 100,000 jobs. Medium-sized firms (50 to 100 workers) also did a good bit of hiring, to the tune of 87,000 new positions. But large businesses lagged in hiring, adding a net of only 22,000 jobs. Both the service and goods sectors were hiring, adding 164,000 and 45,000 positions, respectively.
Separately, the Institute for Supply Management reported that its service-sector index experience a downtick to 56 in March from 57.3 in February. Most of the decline occurred because new orders and production dropped. Still, since the index remains over 50—where it’s been for more than two years—more service-sector companies are expanding than contracting.
While Greece got most of the attention earlier this year for its drawn-out debt crisis, Spain simmered not-so-quietly (but largely ignored) on the other side of Europe, a much larger country with a much larger economic crisis of its own. Indications on Wednesday were that the Spanish situation might be coming to a boil.
Investors seem to have little confidence in Spain, with an auction of Spanish bonds faring badly on Wednesday, selling 2.6 billion euros out the 3.5 billion the government wanted to sell. Demand for them was weak, and the country’s 10-year yields rose to 5.7 percent, the highest mark thus far for 2012 (and with no guarantee there won’t be even higher highs). Austerity, it seems, is taking the country nowhere fast, or rather, in reverse fast, at a time when the official unemployment rate is about 23 percent.
And what about that “firewall” that euro-zone panjandrums have been crowing about lately? Supposedly it totals $1 trillion, which sounds impressive, but after all is said and done, the total is actually closer to half that. It might be enough, in other words, to bail out the likes of Greece (again), Ireland or Portugal, but Spain, the number-four economy (even in its terrible condition) in the European Union? Investors aren’t betting on it these days.
Europeans not shopping as much
Another sign of euro-malaise came from Eurostat on Wednesday, which reported that retail trade in the euro zone dropped 0.1 percent in February compared with January, with countries such as Spain, Greece and Italy dragging things down. For the entire EU (27 countries in all, including those that don’t use the euro), retail sales for the month dropped even more, by 0.4 percent. The year-over-year drop in retail sales for the euro zone was 2.1 percent, and 1.1 percent for the entire EU, according to Eurostat, the statistical office for the EU.
Wall Street got a case of the heebie-jeebies on Wednesday, perhaps as it dawned on investors that the Fed was going to stay away from QE3 as long as U.S. employment numbers were reasonably good last month. The Dow Jones Industrial Average lost 124.8 points, or 0.95 percent, while the S&P 500 was down 1.02 percent and the Nasdaq declined 1.46 percent.