Private Sector Shows Unexpected Job Growth
U.S. private-sector employers unexpectedly added 8,000 jobs in March, a report by a private employment service said on Wednesday, confounding economists' expectations of a fall.
Earlier, a separate survey showed planned layoffs by US companies fell 26 percent in March from the previous month, suggesting there were pockets of resilience in an otherwise weakening jobs market.
Though the gain was small, it was a vast improvement from February's revised job losses of 18,000. The February figure was originally reported by ADP as a drop of 23,000.
The ADP release comes ahead of Friday's monthly jobs report by the government, which analysts expect to show a fall of 60,000 in March non-farm payrolls, according to a poll by Reuters.
"The ADP report doesn't change my view that the situation in the U.S. labor markets continues to deteriorate," said Kurt Karl, chief U.S. economist at Swiss Re in New York.
"The problem with ADP also is that this report is extremely volatile and usually misaligned with the government report. I would take it with a grain of salt."
On Wall Street, stock futures extended their gains on the unexpected rise, while the dollar advanced versus the yen.
Government bond prices, which tend to retreat in the face of economic strength, fell.
The median of estimates from economists surveyed by Reuters was for the ADP report to show 48,000 private-sector jobs were cut in March.
Meanwhile, the employment consulting firm Challenger, Gray & Christmas said Wednesday planned layoffs decreased to 53,579 in March from February's 72,091.
The Challenger report showed planned layoffs were up 9.4 percent from 48,997 in March 2007.
It also showed that weakness in the labor market was continuing to spread from the financial sector, which was hurt by last year's mortgage debacle, to other areas of the economy.
For the second consecutive month, the government and non-profit sector led all job cuts, with 16,167, more than three times the 5,089 planned lay-offs in the next-largest job-cutting sector, transportation. The financial sector was third, with 4,663.
Challenger said the public sector was suffering "from a precipitous drop in tax revenue" that has accompanied the economic downturn, even though the slowdown initially started in the housing market and related sectors.
"The downturn is probably best known for its impact on the financial sector, including thousands of job cuts in mortgage lending and investment banking. However, the downturn is having a significant impact on the public sector," the report said.
Challenger said the amount of job cuts was not on the same level as that accompanying the 2001 recession.
"There could be several explanations for this. For one, job creation never reached the levels we saw prior to the 2001 recession," John Challenger, chief executive officer of Challenger, Gray & Christmas, said in the report.
"There was a long period of jobless recovery that lasted until September 2003. Employers simply may not have as much fat to trim from their payrolls," he said.
Through the first quarter, job cuts totaled 200,656, up 2.4 percent from the 195,986 cuts in the same period in 2007.