Private Sector Adds 209,000 Jobs; Services Lead Growth
The private sector created 209,000 jobs in March, continuing the slow but steady rise in employment that has characterized the employment market for months.
Services again led the job creation, according to a report from ADP and Macroeconomic Advisors.
The service sector increased 164,000 in March, though the rate of job creation slowed a big from the upwardly revised 183,000 in February.
"It's got to go this way," Joel Prakken, chairman of Macroeconomic Advisors, told CNBC. "Early in the recovery you normally see a pop in manufacturing employment, but that sector no longer counts for enough of the total employment in the United States to be the eventual long-run driver of the recovery. You've got to have the recovery in service-sector jobs."
Job creation in goods-producing businesses rose 45,000 for the month, while manufacturing rose 23,000 and construction grew 13,000.
The financial sector added 8,000 positions for the month.
Small businesses —defined has having fewer than 50 employees — led the way in job creation, adding 100,000 positions. Medium-sized firms added 87,000, while large businesses with 500 or more employees lagged with 22,000 new positions added.
Financial markets reacted modestly to the report, with stock market futures edging up a bit from their lows of the morning, while Treasurys cut a bit of their price gains.
The ADP release traditionally sets the stage for the government's nonfarm payrolls report to be released Friday. Economists expect the payrolls number to grow by about 207,000 and the unemployment rate to hold steady at 8.3 percent.
ADP's numbers were a shade below consensus though unlikely to generate any substantial revisions to the nonfarm number.
"We really should see faster growth than this if we're going to push the unemployment rate down persistently," Prakken said.
The March numbers could be tricky in that unseasonably warm weather this winter may have played havoc with the usual seasonal adjustments government economists use to gauge employment trends.
"We really need to see the April numbers to gauge any weather distortions. The other worry is gasoline prices and whether that has slowed hirings. The impact usually shows up later because there is typically a lag," Scott Brown, chief economist at Raymond James in St. Petersburg, Fla., told Reuters. "It's still encouraging. We would prefer to see stronger job growth at this time, but we'll take it. "