US ADP Payrolls Adds Fewer Workers with 169,000

U.S. private employers in April added the fewest number of workers in more than a year, which could heighten worries about the economy’s potential to rebound strongly from a first-quarter slump.

Private payrolls increased 169,000 last month, the ADP National Employment Report showed. That was the fewest since January 2014 and far below economists’ expectations for a gain of 200,000 jobs.

March payrolls were revised down to show 14,000 fewer jobs created than previously reported. The report jointly developed with Moody’s Analytics was released ahead of the government’s more comprehensive employment report on Friday.

While it has a poor track record of predicting nonfarm payrolls, the ADP report poses a downside risk to economists’ expectations for nonfarm payrolls growth of 224,000 in April.

Yields on U.S. Treasuries rose and U.S. stock index futures traded slightly higher after the data. The dollar was weaker against a basket of currencies.

A combination of cold weather, a strong dollar, port disruptions and deep spending cuts by energy companies, held down first-quarter economic growth to a 0.2 percent annual pace.

A jump in the U.S. trade deficit in March, however, suggests the economy actually contracted in the first three months of the year after expanding at a 2.2 percent pace in the fourth quarter.

In a separate report on Wednesday, the Labor Department said nonfarm productivity fell in the first quarter as harsh winter weather weighed on output, pushing labor-related production costs to rise at their quickest pace in a year.

via Reuters

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza