US businesses added more than 200,000 jobs in March, giving fresh evidence of recovery in the labour market, data showed on Wednesday. The ADP National Employment Report showed the private sector added 209,000 positions last month, slightly above economists' expectations for a gain of 200,000 jobs.
Analysts said it did not change their forecasts for the government's more comprehensive labour market report for March due on Friday, which includes both public and private sector employment. Separate data showed a measure of employment in the vast US services sector also rose last month, even though the pace of overall growth slowed. Analysts said the pullback was expected after the index ran up to a year high in February.
Anthony Chan, chief economist at J.P. Morgan Private Wealth Management, said some of the positive effects of the unusually warm weather at the beginning of the year could be starting to wear off but the easing in activity was not as deep as some had feared. "That worst-case scenario where the economy would completely fall off a cliff and do a 'Thelma and Louise' is not happening," said Chan.
Federal Reserve policymakers backed away from the idea of launching a third round of monetary action as the recovery gradually improves, minutes from the US central bank's last meeting showed on Tuesday. Still, the Fed's assessment of the economy remained cautious. Economists expect growth to have slowed in the first quarter compared to the 3.0 percent annualised rate seen in the final months of last year.
ADP also revised higher the job gains seen in January and February to 182,000 and 230,000, respectively. The report is jointly developed with Macroeconomic Advisers LLC. "There's still a very, very long way to go with this healing we need to do in the labour market, but there is a little bit of steam that's picking up here," said Sam Bullard, senior economist at Wells Fargo in Charlotte, North Carolina.
The nonfarm payrolls report from the US Labour Department on Friday is expected to show a net gain of 203,000 jobs last month, including a rise in private payrolls of 218,000. The unemployment rate is seen holding steady at a three-year low of 8.3 percent. The Labour Department report has shown the economy added more than 200,000 jobs in each of the last three months, helping to keep the economic recovery on track.
Economists often refer to the ADP report to fine-tune their expectations for the Labour Department's payrolls numbers, though the two sets of data are not always well correlated. The average difference between ADP's figures and the government-reported private jobs numbers over the last 12 months was 1,000, according to Credit Suisse.
The Institute for Supply Management said its services index fell to 56.0 last month from 57.3 in February, shy of economists' forecasts for 57.0. The forward-looking new orders component slipped to 58.8 from 61.2. The services sector accounts for about two-thirds of US economic activity. The employment index improved to 56.7 from 55.7, while a measure of prices paid fell back to 63.9 from 68.4.
Other reports on Wednesday provided hints of optimism for the struggling housing market as applications for mortgages gained last week, while home prices excluding distressed sales managed to rise in February. The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes both refinancing and home purchase demand, rose 4.8 percent in the week ended March 30. Data from CoreLogic showed overall home prices declined 0.8 percent in February, but excluding cheaper distressed sales, prices rose 0.7 percent.
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