WASHINGTON, May 1 — American firms hired at a blistering pace in April, the fastest in nine months, kicking off the second quarter of the year with a bang, according to a payroll data released today.
The private sector data comes on the day the Federal Reserve is due to make its latest pronouncement on interest rates, and adds to the conflicting dynamic facing central bankers with data showing the economy continues to grow but with few signs of accelerating wages or inflation.
US private hiring surged by 275,000 new positions — beating the consensus forecast by more than 100,000 — driven by a huge increase in the dominant services sector which posted the biggest gain since mid-2016, payroll services firm ADP reported.
However, economists may take the increase with a grain of salt.
The data show the “economic soft patch at the start of the year has not materially impacted hiring,” said Mark Zandi, chief economist at Moody’s Analytics, which jointly produces the report.
However, he cautioned that “April’s job gains overstate the economy’s strength.” Still “they make the case that expansion continues on.”
The goods-producing sector rebounded as well, adding 52,000 employees after a slight decline in March — including 5,000 in manufacturing and 49,000 in construction — but it employs only about one-fifth the number of workers as services.
After weak economic data in the final months of 2018 helped send financial markets into turmoil, the Federal Reserve clearly signalled that it would not raise the benchmark lending rate for the foreseeable future, or until it sees a clear trend.
Since then indications are going in the other direction, with 3.2 per cent growth in the first quarter and solid hiring, which normally would increase pressure on the Fed to raise rates.
However, inflation has been sinking even further below the central bank’s 2 per cent target, which would tend to fuel the case for cutting rates — something President Donald Trump yesterday again urged the Fed to do.
The ADP data come two days before the official government employment report for April, which economists currently predict will include a 180,000 gain in private jobs. — AFP
