The ADP National employment report represents 400,000 U.S. business clients and approximately 23M U.S. employees working in all private industrial sectors. The recent numbers saw private payrolls rising only 156,000 in April, the lowest economic cycle since 142,000 in February 2014.
We are also seeing a slowing in the nation’s output. Despite an increase in hours worked, productivity fell at an annualized 1.0 % rate in the first quarter for the 4th decline in the last six months.
Output was only 0.4 % higher in the quarter despite an increase of 1.5 % rise in hours worked. Weak output increased unit labor costs 4.1 % for the quarter.
These troubling numbers reflect the declines in spending on capital goods.
One small bright spot was the U.S. service sector saw stronger growth in April. The index of nonmanufacturing economic activity rose to 55.7 in April from 54.5 in March. This covers everything from restaurant meals to dry cleaning. One thing I’ve noticed, the restaurants are always full on the weekends. A reading above 50 indicates that activity is expanding, while a reading below 50 points to contraction.
Are we truly turning into a service industry verses manufacturing? Our GDP grew only 0.5 % in the first quarter.
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