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Thursday, May 3, 2012

Payroll adds slow in April

LOS ANGELES – The number of workers added to private-sector payrolls in April fell to the lowest level in seven months, a payroll-processing company reported, sparking trepidation for the official government employment numbers coming Friday.

Companies increased their workforce by 119,000 employees last month, after adding a downwardly revised 201,000 workers in March, according to Automatic Data Processing Inc., or ADP.

That’s the smallest boost since September. Analysts had expected a 170,000-employee boost.

And all of the new hires came from service providers, who took on 123,000 new workers. Goods-producing companies trimmed their head count by 4,000 employees.

Both manufacturing and construction employment also fell, reversing gains from the unseasonably warm winter.

Small businesses led the hiring charge with 58,000 additional workers, followed closely by medium-sized businesses. Large firms took on 4,000 new employees. But all three segments hired fewer people than they did in March.

“We hope future rates of job creation will be more aggressive and sustained,” said Carlos Rodriguez, chief executive of ADP, in a statement. He added that the data were consistent with the gross domestic product’s weak 2.2 percent growth in the first quarter.

The ADP numbers raised concerns about what the Labor Department’s Friday employment figures will hold. The government’s March report showed all employers – public and private – adding a modest 120,000 new jobs. More people dropped out of the job market, shrinking the labor force.

But some analysts cautioned that ADP’s reports have “had some big misses in recent months in either direction” compared to official private payroll figures, with Credit Suisse’s Jonathan Basile calculating that ADP’s data overshot by 88,000 workers in March and under-estimated by 87,000 employees in January.