Bad News For April Jobs Report?

If today’s report from Automatic Data Processing on April hiring by private-sector firms is any indication, Friday’s report from the Bureau of Labor Statistics could end up being pretty disappointing:

(Reuters) – Companies hired a far fewer than expected 119,000 people in April, the smallest gain in seven months and adding to concerns that the economy has lost some of its momentum.

The ADP National Employment Report released on Wednesday fell below economists’ expectations for a gain of 177,000 jobs, while March’s figure was also revised lower. April’s figure was the smallest gain since September of last year.

The report by ADP, a payrolls processor, is published two days before the government’s broader and much watched monthly jobs report.

“This is an upsetting report,” said David Carter, chief investment officer at Lenox Advisors in New York.

“The strength of the U.S. economic rebound is clearly still uncertain. Hopefully we don’t get a third consecutive summer of weaker growth.”

The ADP isn’t the only bad economic news released today, though, as the Commerce Department reported that March factory orders fell to their lowest level in three years:

New orders for U.S. factory goods in March recorded their biggest decline in three years as demand for transportation equipment and a range of other goods slumped, government data shoThe Commerce Department said orders for manufactured goods dropped 1.5 percent after a revised 1.1 percent rise in February.

Economists had forecast orders falling 1.6 percent after a previously reported 1.3 percent increase in February.

While the report showed broad weakness in March in a sector that has carried the economic recovery, anecdotal evidence suggests factories continued to expand as the second quarter on Wednesday.

There’s some evidence that auto sales increased in April, which is at least good news for that segment of the economy. Overall, however, we seem to be seeing at least some corroboration for the idea that the economic growth in the First Quarter, which wasn’t very strong to begin with, was at least in part boosted by the fact that the nation experienced an unusually warm winter. We’ll get our first indication of how the Spring is going on Friday, but if the ADP report is any indication, it’s going to be a very disappointing employment report.

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Doug Mataconis
About Doug Mataconis
Doug Mataconis held a B.A. in Political Science from Rutgers University and J.D. from George Mason University School of Law. He joined the staff of OTB in May 2010 and contributed a staggering 16,483 posts before his retirement in January 2020. He passed far too young in July 2021.


  1. BigFire says:

    There are Lies, Damn Lies and Statistics. BLS is if nothing rather consistent on painting a more rosy picture than usual. What you want to read is not their immediate report, but the correction that from the next week to give you the more correct number. Of course, not counting the discourage work seeker also helps..

  2. Dave Schuler says:

    Weellll, the BLS wasn’t involved in anything mentioned in the post itself—what were mentioned were ADP and the Department of Commerce.

    Automatic Data Processing, ADP, is the largest processor of company payrolls. Their statistics are based mostly on medium-sized to largish companies. The ADP numbers have been increasingly deviating from the Bureau of Labor Statistics for several reasons, most notably how much more dependent the total employment picture is on small companies (which don’t fall into ADP’s net) and the various fudge factors the BLS is using. It’s pretty clear that the the BLS’s Birth/Death ratio, a fudge factor that adds/subtracts jobs from the totals based on estimated creation and dissolution of companies over the business cycle, needs recalibration.

    What can we determine from ADP’s numbers? Not a heckuva lot. They’re not moving the right way. I’d infer that big companies aren’t hiring but we knew that already.

  3. There’s some evidence that auto sales increased in April, which is at least good news for that segment of the economy.

    Every sale has a buyer and a seller.

    The auto numbers are good news for the industry, as well as an indication that buyers are near-term optimistic about their own financial condition.

  4. Ben Wolf says:

    I suppose we can at least say it could be worse. Europe has, predictably, failed to deal with their currency crisis and unemployment reached a new high of 11%, with Germany having experienced its second straight quarter of economic contraction (I won’t say I told you so, because I did). The countries faring most badly are those with chronic trade deficits and austerity programs cutting into their private sectors’ financial wealth.

  5. @john personna:

    As someone in auto sales reminded me after I posted this, April has traditionally been a good month for sales. Tax refunds and all that. So whether it means anything long term is unclear.

  6. @Doug Mataconis:

    (They are reporting year-over-year numbers.)

  7. Let's Be Free says:

    Without Toyota there was no April auto sales bump. Last year’s Toyota sales were constrained by supply disruptions related to the earthquake and tsunami in Japan. The April auto sales spike was a tectonic, not economic boost.