Economy Watch: Employment a Little Softer in April?

Recent jobs reports are sending mixed messages on the growth in employment numbers for April.
Change in Nonfarm Private Employment (Credit: ADP National Employment Report, April 2016)
Change in Nonfarm Private Employment (Credit: ADP National Employment Report, April 2016)

In the run-up to the official employment numbers from the Bureau of Labor Statistics on Friday, Automated Data Processing reported on Wednesday that by its calculations, private sector employment increased by 156,000 jobs from March to April—softer than in previous months. The company’s report, which is derived from ADP’s payroll data, measures the change in total private employment each month, not using the more expansive BLS model that includes the public sector as well.

According to ADP, goods-producing employment dropped by 11,000 jobs in April, but the construction industry added 14,000 jobs, and service-providing employment rose by 166,000 jobs. Also, manufacturing lost 13,000 jobs, presumably because of sluggish demand from overseas and the strong dollar. All together, the ADP report seems to be predicting a softer month for hiring, but on the other hand, ADP’s numbers are often at odds with those of the BLS.

In a separate report on Wednesday, the latest Non-Manufacturing ISM Report On Business found that economic activity in the non-manufacturing sector grew in April for the 75th consecutive month, according to the nation’s purchasing and supply executives. The Non-Manufacturing Index registered 55.7 percent in April, 1.2 percentage points higher than the March. This represents continued growth in the non-manufacturing sector, and at a slightly faster rate.

“The majority of the respondents’ comments reflect optimism about the business climate and the direction of the economy,” noted Anthony Nieves, chair of the ISM’s Non-Manufacturing Business Survey Committee, who penned the report. According to the index, 13 non-manufacturing industries reported growth in April.