It’s still growing, but job creation slowed last month, according to today’s release of the ADP Employment Report. Nonfarm private jobs rose by 179,000 in April on a seasonally adjusted basis–down from March’s gain of 207,000. That’s strong enough to offer convincing evidence that the labor market is still expanding with enough forward momentum to keep the party going in the months ahead. But it’s also true that last month’s gain was the smallest since last November’s tepid 122,000 rise.
Nonetheless, the labor market has expanded for 15 straight months, based on ADP numbers. Private-sector employment is higher by more than 1.6 million since the end of January 2010. That’s a lot of jobs in the abstract, although it’s still a small fraction of the 7.8 million jobs lost in the Great Recession, as per ADP’s reckoning.
The implication in today’s ADP report is that the U.S. unemployment rate for April, as per the government’s update scheduled for release on Friday, will show little if any decline from the elevated 8.8% rate reported for March. If we compare ADP’s employment figures with the Labor Department’s establishment survey tally of private job growth recently, today’s report suggests that Friday’s payroll update will be relatively weak too.
As the second chart below suggests, the government’s numbers have been a bit strong over the last several months compared with ADP’s estimates. That’s no guarantee that Friday’s number will be weak, but given the recent uptick in new jobless claims there’s reason for caution on expecting a robust upswing in job growth at the moment.
Paring expectations already appears built into expectations for Friday’s report. The consensus forecast from economists calls for a rise of 200,000 private-sector jobs in the coming government update, according to Briefing.com. If that proves accurate, it would represent a sizable downshift from March’s 230,000 gain.
Sizable but hardly fatal. The labor market is still growing; while it’s far from what’s needed to make a major dent in the jobless rate, it’s still strong enough to keep talk at the margins for a repeat performance of last year’s spring/summer economic slowdown that seemed to threaten a new recession. Indeed, last month’s 179,000 rise in private-sector jobs via ADP is substantially higher than the year-earlier gain of 113,000 in April 2010. And while we don’t yet have the government’s latest tally for last month, the March 2011 rise of 230,000 for private payrolls based on Labor Department’s estimates is nearly 60% higher than the comparable figure from a year previous.
In short, job growth is stronger this spring vs. last year. There’s no law that says this must continue, but the trend compares favorably for the moment. That’s no silver bullet, but it’s something. But as Steven Ricchiuto, chief economist at Mizuho Securities USA, reminds via Bloomberg today: “This pace [of job growth] keeps things moving forward but not at a strong enough growth rate to really, really improve labor market conditions and improve the economy. The labor market is still underperforming the expectations where growth will be and should be at this point.”