Labor data show the economy is slowing, ADP says
Private payroll processor ADP reported job growth in March was about half the level from February and annual wages are on the decline, pointing to a slowing economy.
ADP does not provide granular analysis of activity in any particular sector, though a March survey from the Federal Reserve Bank of Dallas found that manufacturing activity was mixed, though the general perception was that business conditions were on the decline.
The financial sector buckled last month, meanwhile, after the collapse of Silicon Valley Bank in California sparked concerns about a global banking crisis.
The Federal Reserve, however, raised interest rates again last month because inflation is still running about three times above its target rate of 2% annually.
"The job market is beginning to find its balance as consumer demand ebbs and the cost of borrowing goes up," ADP's report read.
Compounding the emerging weakness in labor, ADP reported that annual pay increased by 6.9% last month, down from 7.2% in February.
Markets were in the red in early trading Wednesday. The Dow was down 0.6% and the tech-heavy NASDAQ was off by 0.62% as of 9:50 a.m. EDT. The S&P was lower by 0.14%.
U.S. energy data suggests a cooling economyPrivate payroll processor ADP reported job growth in March was about half the level from February and annual wages are on the decline, pointing to a slowing economy.
File photo by Jim Ruymen/UPI | License Photo
April 5 (UPI) -- Private sector employees in March added about 100,000 fewer jobs to their payrolls than they did the prior month, showing the economy is slowing down, payroll processor ADP said Wednesday.
"Our March payroll data is one of several signals that the economy is slowing," said Nela Richardson, the chief economist at ADP. "Employers are pulling back from a year of strong hiring and pay growth, after a three-month plateau, is inching down."
Data show private-sector employment increased by 145,000 last month, lower than the 240,000 in new hires in February. Data from the Job Openings and Labor Turnover Summary, or JOLTS, from Tuesday showed job openings slumped to a two-year low at 9.9 million as of the last full day in February.
By sector, ADP data show manufacturing suffered the most in the industry sector, shedding 30,000 jobs last month. In the services sector, jobs in finance fell by 51,000.
April 5 (UPI) -- Private sector employees in March added about 100,000 fewer jobs to their payrolls than they did the prior month, showing the economy is slowing down, payroll processor ADP said Wednesday.
"Our March payroll data is one of several signals that the economy is slowing," said Nela Richardson, the chief economist at ADP. "Employers are pulling back from a year of strong hiring and pay growth, after a three-month plateau, is inching down."
Data show private-sector employment increased by 145,000 last month, lower than the 240,000 in new hires in February. Data from the Job Openings and Labor Turnover Summary, or JOLTS, from Tuesday showed job openings slumped to a two-year low at 9.9 million as of the last full day in February.
By sector, ADP data show manufacturing suffered the most in the industry sector, shedding 30,000 jobs last month. In the services sector, jobs in finance fell by 51,000.
ADP does not provide granular analysis of activity in any particular sector, though a March survey from the Federal Reserve Bank of Dallas found that manufacturing activity was mixed, though the general perception was that business conditions were on the decline.
The financial sector buckled last month, meanwhile, after the collapse of Silicon Valley Bank in California sparked concerns about a global banking crisis.
The Federal Reserve, however, raised interest rates again last month because inflation is still running about three times above its target rate of 2% annually.
"The job market is beginning to find its balance as consumer demand ebbs and the cost of borrowing goes up," ADP's report read.
Compounding the emerging weakness in labor, ADP reported that annual pay increased by 6.9% last month, down from 7.2% in February.
Markets were in the red in early trading Wednesday. The Dow was down 0.6% and the tech-heavy NASDAQ was off by 0.62% as of 9:50 a.m. EDT. The S&P was lower by 0.14%.
Applications for jobless aid rising but still at low levels
By MATT OTT
A hiring sign for tree care service work is posted in Wheeling, Ill., Sunday, March 19, 2023. On Thursday, the Labor Department reports on the number of people who applied for unemployment benefits last week. (AP Photo/Nam Y. Huh)
The number of Americans seeking unemployment aid was higher over the past few months than the government had initially reported, reflecting a modest rise in layoffs as the economy has slowed in the face of higher interest rates.
The Labor Department reported Thursday that the number of applications has exceeded 200,000 since early February — above previous estimates, though still relatively low by historical standards.
The department has revised its estimates of the number of weekly applications for jobless benefits under a new formula it is using to reflect seasonal adjustments. The new formula is intended to more accurately capture seasonal patterns in job losses.
For the week that ended April 1, the number of Americans applying for jobless aid was 228,000, the government estimated. That was down from 246,000 in the previous week and 247,000 in the week before that. Using its new seasonal adjustment formula, the government revised up each of those figures by nearly 50,000.
“The trend in seasonally adjusted initial claims is noticeably higher than previously estimated, which does suggest that the flurry of layoff announcements so far this year has begun to show up in these data,” Stephen Stanley, chief U.S. economist of Santander U.S. Capital Markets, wrote in a research note.
First-time applications for unemployment benefits serve as a proxy for the number of job cuts because most people who are laid off file for jobless aid. About 1.82 million people were receiving jobless aid in the week that ended March 25, an increase of 6,000 from the week before.
The job market appears to be finally showing some signs of softening, more than a year after the Federal Reserve began an aggressive campaign to cool inflation by steadily raising its benchmark borrowing rate.
On Tuesday, the Labor Department reported that U.S. job openings slipped to 9.9 million in February, the fewest since May 2021. And on Wednesday, the payroll firm ADP reported that the nation’s private employers added 145,000 jobs in March, down sharply from 261,000 in February. Pay raises also weakened for workers, according to the ADP Research Institute.
ADP’s figures often diverge, from month to month, from the government’s more comprehensive jobs report, which provides a more granular review of the labor market, though the two tend to converge over time. On Friday, when the government issues the March jobs report, analysts expect it to show that employers added a solid 240,000 jobs last month.
In February, the government reported, employers added a robust 311,000 jobs, fewer than January’s huge gain but enough to keep pressure on the Fed to keep raising rates to fight inflation. The unemployment rate rose to 3.6%, from a 53-year low of 3.4%.
In its latest quarterly projections, the Fed predicts that the unemployment rate will rise to 4.5% by year’s end, a sizable increase historically associated with recessions.
Layoffs have been mounting in the technology sector, where many companies hired aggressively during the pandemic. IBM, Microsoft, Salesforce, Twitter and DoorDash have all announced layoffs in recent months. Amazon and Facebook have each announced two sets of job cuts since November.
By MATT OTT
A hiring sign for tree care service work is posted in Wheeling, Ill., Sunday, March 19, 2023. On Thursday, the Labor Department reports on the number of people who applied for unemployment benefits last week. (AP Photo/Nam Y. Huh)
The number of Americans seeking unemployment aid was higher over the past few months than the government had initially reported, reflecting a modest rise in layoffs as the economy has slowed in the face of higher interest rates.
The Labor Department reported Thursday that the number of applications has exceeded 200,000 since early February — above previous estimates, though still relatively low by historical standards.
The department has revised its estimates of the number of weekly applications for jobless benefits under a new formula it is using to reflect seasonal adjustments. The new formula is intended to more accurately capture seasonal patterns in job losses.
For the week that ended April 1, the number of Americans applying for jobless aid was 228,000, the government estimated. That was down from 246,000 in the previous week and 247,000 in the week before that. Using its new seasonal adjustment formula, the government revised up each of those figures by nearly 50,000.
“The trend in seasonally adjusted initial claims is noticeably higher than previously estimated, which does suggest that the flurry of layoff announcements so far this year has begun to show up in these data,” Stephen Stanley, chief U.S. economist of Santander U.S. Capital Markets, wrote in a research note.
First-time applications for unemployment benefits serve as a proxy for the number of job cuts because most people who are laid off file for jobless aid. About 1.82 million people were receiving jobless aid in the week that ended March 25, an increase of 6,000 from the week before.
The job market appears to be finally showing some signs of softening, more than a year after the Federal Reserve began an aggressive campaign to cool inflation by steadily raising its benchmark borrowing rate.
On Tuesday, the Labor Department reported that U.S. job openings slipped to 9.9 million in February, the fewest since May 2021. And on Wednesday, the payroll firm ADP reported that the nation’s private employers added 145,000 jobs in March, down sharply from 261,000 in February. Pay raises also weakened for workers, according to the ADP Research Institute.
ADP’s figures often diverge, from month to month, from the government’s more comprehensive jobs report, which provides a more granular review of the labor market, though the two tend to converge over time. On Friday, when the government issues the March jobs report, analysts expect it to show that employers added a solid 240,000 jobs last month.
In February, the government reported, employers added a robust 311,000 jobs, fewer than January’s huge gain but enough to keep pressure on the Fed to keep raising rates to fight inflation. The unemployment rate rose to 3.6%, from a 53-year low of 3.4%.
In its latest quarterly projections, the Fed predicts that the unemployment rate will rise to 4.5% by year’s end, a sizable increase historically associated with recessions.
Layoffs have been mounting in the technology sector, where many companies hired aggressively during the pandemic. IBM, Microsoft, Salesforce, Twitter and DoorDash have all announced layoffs in recent months. Amazon and Facebook have each announced two sets of job cuts since November.
Market watchers see signs of a cooling economy in data figures from the federal government. Implied demand was off from year-ago levels, according to the Energy Department. Photo by John Angelillo/UPI | License Photo
April 5 (UPI) -- Implied demand for refined petroleum products such as gasoline show the U.S. economy may be cooling off, analysis of recent federal data found.
The U.S. Energy Information Administration, the Energy Department's data cruncher, showed total commercial crude oil inventories declined by 3.7 million barrels from week-ago level
An emailed report from S&P Global Commodity Insights said the decline in crude oil inventories suggested refineries were busy. S&P estimates refineries put 1 million barrels per day more through their systems than they did during the week ending March 3, which would explain some of the inventory decline.
Inclement weather in Texas late last year limited refinery activity before a regular period of late-winter maintenance that coincides with a shift to a summer blend of gasoline, which requires additional processing steps to keep it from evaporating during warmer months.
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While S&P data pointed to a larger draw on commercial storage levels than the government, the agency said that any decline was likely the result of increased refinery activity. Federal data show refineries were working at 89.6% of their full capacity last week, compared with a run rate of 86% for the seven-day period ending March 3.
On the demand side, federal data show the total amount of refined petroleum products sent to the market over the four-week period ending March 31 averaged 20.1 million barrels per day, down 1.5% from year-ago levels.
Analysts use that data point as a proxy for demand. Tom Kloza, the head of the Oil Price Information Service, said that data shows a clear economic decline.
"If you believe gasoline demand is well above last year, you may be deluding yourself," he said from his official account on Twitter.
Demand could be on the decline because of an uptick in retail gasoline prices, which at $3.53 for a national average are 13 cents per gallon more than this time last month, according to AAA.
Recent data from the labor sector, meanwhile, showed the economy is cooling off.
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"Our March payroll data is one of several signals that the economy is slowing," said Nela Richardson, the chief economist at ADP. "Employers are pulling back from a year of strong hiring and pay growth, after a three-month plateau, is inching down."
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