Hiring Drops, Manufacturing Growth Slows
Below expectations for April
Companies hired the smallest number of employees in seven months in April while manufacturing growth slowed, suggesting the economy is encountering a soft patch as tighter fiscal policy starts to hold back growth.
Businesses added 119,000 employees to their payrolls last month, according to the ADP National Employment Report released on Wednesday. It fell short of economists' expectations for 150,000 jobs and was the smallest gain since last September.
The slowdown was primarily due to the effect of tighter fiscal policy through a combination of an increase in payroll taxes at the start of the year and the $85 billion government spending cuts that went into effect across the board in March, said Mark Zandi, chief economist at Moody's Analytics, which jointly develops the ADP report.