Private employers added far fewer jobs than expected in April, a report by a payrolls processor showed on Wednesday. It was the slowest gain since September 2011 and raised worries about the crucial employment report coming Friday.
ADP said its National Employment Report showed a gain of 119,000 jobs versus expectations of a 177,000-jobs increase. The report is jointly developed with Macroeconomic Advisers LLC.
"This is an upsetting report," said David Carter, chief investment officer at Lenox Advisors in New York.
"The strength of the U.S. economic rebound is clearly still uncertain. Hopefully we don't get a third consecutive summer of weaker growth."
The report covers hiring only in the private sector. And it has been known to deviate sharply from the government's figures, which will be released on Friday.
For example, the government said employers added just 120,000 jobs in March — much lower than ADP's estimate.
March's private payrolls figure was revised down to an increase of 201,000 from the previously reported 209,000.
The manufacturing sector shed 5,000 jobs, the first loss since September of last year. That was in contrast to more cheery data on Tuesday that showed a gauge of employment in the sector rose to its highest level since last June.
Friday's payrolls report is expected to show employers hired 170,000 people last month, according to the median forecast in a Reuters poll carried out earlier this week, an improvement from a meager 120,000 in March.
Jonathan Basile, director of economics at Credit Suisse, said Wednesday's ADP report did not change his forecast for a gain of 150,000 in Friday's jobs data, noting ADP had a mixed record as an indicator of the payrolls numbers.
"For what it's worth, the first print of ADP...has had some big misses in recent months in either direction compared to the first print of private payrolls. For instance, ADP overshot by 88,000 in March, undershot by 87,000 in January and overshot by 113,000 in December," Basile said in a note.
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Reuters and The Associated Press contributed to this report.
