Economy, Small Business

Economic Data Roundup (05/03/2017)

5/3/17 12:00 PM

iStock-538890292.jpgThere were several important reports on the U.S. economy released this morning. First, data from ADP showed that business hiring moderated in America last month, as 177K private-sector payrolls were added to the economy in April. That was in line with the 170K increase economists had expected but still a marked slowdown from March’s downward-revised 255K gain. However, the less volatile 3-month average for ADP’s hiring estimate ended April at +227K, an overall healthy pace of job creation. Under the hood, most of the private-sector payrolls added last month were as usual found in the services sector (+165K), including large gains in the “professional & business,” “leisure & hospitality,” and “education & health” arenas. However, payrolls in the goods-producing sector experienced a net gain of 12K jobs in April, the third monthly improvement in a row. Another highlight from the report is that small business continued to be a big driver of private-sector job creation in America, as firms with 1-49 employees added 61K payrolls last month, equating to 34 percent of the headline employment gain. Mark Zandi, chief economist of Moody’s Analytics added that, “Job growth slowed in April due to a pullback in construction and retail jobs. The softness in construction is continued payback from outsized growth during the mild winter. Brick-and-mortar retailers cut jobs in response to withering competition from online merchants.”


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Elsewhere, the purchasing managers' index (PMI) from IHS Markit for the U.S. services sector, which accounts for a much larger share of the overall economy than manufacturing, ended April at 53.1. That was the first monthly increase since January and better than forecast. Gauges of employment and input cost inflation worsened last month but a third of surveyed managers said that they expect to see a rise in activity this year, the highest level of reported confidence in three months. Similarly, the Institute for Supply Management’s (ISM’s) non-manufacturing index, also released this morning, rose in April to 57.5, significantly better than anticipated. Measures of new orders, production, and exports all improved last month but employment cooled and inflation pressures rose. Comments from surveyed managers were generally positive in April. Chris Williamson, chief business economist at IHS Markit, added that “Combined with a weak manufacturing PMI reading, the surveys suggest that business activity is growing at a slower pace than seen over the first quarter as a whole. However, a robust rise is likely to be seen in second quarter GDP.”





Sources: Econoday, Bloomberg, ZH, Twitter, ADP, IHS Markit, ISM, FRBSL

Post author: Charles Couch