Economy Watch: ADP Reports Weak Hiring in April

By Dees Stribling, Contributing Editor

Automated Data Processing, whose employment numbers were on the high side last month, said on Wednesday—in the run-up to the much-awaited official employment data—that the U.S. private sector hired a net of 119,000 workers in April. The estimated gain in March was revised down modestly, from an initial estimate of 209,000 to a revised estimate of 201,000 (both of which were higher than the U.S. government numbers, though the latter includes public sector workers).

According to ADP, employment in the service sector rose 123,000 in April, while the number of workers in the goods-producing sector declined 4,000. Manufacturing employment declined by 5,000, the first drop in that category since September of last year. Small businesses (fewer than 50 employees) added the most workers, up 58,000, while mid-sized businesses (50-100 workers) adding almost as many, up 57,000.

The addition of jobs might be sluggish, but at least the U.S. labor market, however the official numbers turn out on Friday, isn’t headed in the same direction as the euro zone. According to the statistical agency Eurostat on Wednesday, unemployment in the 17 countries that use the euro rose to 10.9 percent in March from 10.8 percent in February. A year ago, the rate was 9.9 percent. Spain leads the way, with a Depression-sized rate of about 24.1 percent, while the countries with the lowest rates were Austria (4 percent), the Netherlands (5 percent) and Germany (5.6 percent).

Delinquencies down, foreclosures up in March

LPS released its March Mortgage Monitor on Wednesday, finding that 7.09 percent of U.S. residential mortgages were delinquent in March, down from 7.57 percent in February, and down from 7.78 percent during March 2011. Another 4.14 percent of all mortgages are in foreclosure, up from 4.13 percent in February but down from 4.15 percent a year ago (overall, though, the rate is remarkably stable).

As of April, a total of 11.23 percent of all mortgages is either delinquent or in foreclosure. About 1.88 million loans were less than 90 days delinquent, while 1.64 million were 90-days-plus. Just over 2 million loans were in foreclosure, LPS said.

The recent peak of U.S. residential delinquency was in January 2010, when nearly 11 percent (10.97 percent) of mortgage-holders were late. A “normal” rate, according to economists, is 4 percent or perhaps 5 percent, so 7 percent still counts as high. The recent peak of foreclosures was 4.29 percent in October 2011.

CEOs love Texas

Chief Executive magazine said on Wednesday that its survey of 650 CEOs found that the most “business-friendly” state is Texas, while the “least friendly” is California. These contrasting states seem to be fixed in the minds of the nation’s chief executives, since, as the report said, “Texas easily clinched the No. 1 rank, the eighth successive time it has done so. California earns the dubious honor of being ranked dead last for the eighth consecutive year.”

The next-ranking states after Texas, according to the survey, are Florida, North Carolina, Tennessee and Indiana. The states ranked 45th to 49th by the CEOs (just ahead of California) were New Jersey, Michigan, Massachusetts, Illinois and New York.

Wall Street ended the day mixed on Wednesday, with the Dow Jones Industrial Average down 10.75 points, or 0.08 percent, and the S&P 500 losing 0.25 percent. The Nasdaq gained 0.31 percent.