Private-sector job growth slowed to 119,000 in April, ADP says

WASHINGTON -- Private-sector job growth slowed more than expected last month, with employers adding just 119,000 net new workers in a harbinger of a stalling labor market, payroll processing firm ADP said Wednesday.

It was the second straight decline in the widely watched reading, and marked the poorest pace of growth since September. ADP also lowered its March figure to 131,000 from the initial estimate of 158,000.

Analysts had expected the report to show about 150,000 net new private-sector jobs were added in April.

“Job growth appears to be slowing in response to very significant fiscal headwinds,� said Mark Zandi, chief economist at Moody’s Analytics, which assists ADP with the monthly report. “Tax increases and government spending cuts are beginning to hit the job market. “

In January, payroll taxes rose for all workers, and income tax rates went up on household income of more than $450,000 a a year. In addition, automatic federal budget cuts known as the sequester have begun kicking in.

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The ADP report is an important private barometer ahead of Friday’s April jobs report from the Labor Department.

Analysts are expecting the government to report that job growth picked up in April after a disappointing 88,000 net new jobs were added in March.

The median estimate of economists surveyed by Bloomberg News is that the U.S. economy -- private and public sector -- added 148,000 jobs in April.

The ADP report casts some doubt on those estimates.

“This number will probably lead some consensus forecaster to downgrade their payroll forecast for Friday, even if not officially,� said Steven Ricchiuto, chief economist at Mizuho Securities.

He is projecting the Labor Department will report a gain of 125,000 jobs in April.

Zandi noted that private-sector job growth slowed across all industries in April. Manufacturing companies lost 10,000 jobs, the first decline in three months and the biggest drop since September.

Goods-producing companies, such as construction firms, added 6,000 jobs in April, but that was the slowest growth in seven months. Service-sector jobs were up by 113,000, which also was the weakest pace of growth in seven months.

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