The Economic Soft Patch Continues
It might just be the weather or garden-variety economic volatility, but no matter the reason, the storyline of an economic soft patch continued this morning.
First, we received some surprising numbers on the labor market, which had been holding its own in recent months. The March report from payroll processor ADP came in quite a bit below expectations, at 189,000 private sector jobs. Analysts had expected 230,000 jobs in March. The numbers are down from a revised 214,000 jobs in February.
The ADP report tends to give clues about the Labor Department’s employment report, which is scheduled to come out on Friday.
The March ISM manufacturing index, also out this morning, was at 51.5, down from 52.9 in February. It’s been above 50, indicating expansion, for 27 straight months, so “it suggests we’re growing, though at a slower rate, but we’re still growing,” said Bob Hughes, senior research fellow at the American Institute for Economic Research.
The production index ticked up while the new orders index was down slightly, though both remain above 50. The data, however, suggest the drop in new orders was largely due to export orders, with domestic new orders more or less holding steady, Hughes said.
Overall, today’s data show “a slowing in the growth. It’s continued weakness, slowing growth, not recessionary-type numbers,” Hughes said.