ADP report shows hiring ‘well below expectations,’ economist says

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March saw tepid hiring among private-sector employers, which added 158,000 jobs during that period, according to the monthly national employment report released today by Automatic Data Processing.

The majority of the new jobs were in the service industry, which added 151,000 positions. Professional and business services had the largest gain with 39,000 jobs added in March. Trade, transportation and utilities followed with 22,000 and financial activities added 9,000 positions.

The company revised the numbers for the past two months. February’s job numbers increased by 39,000, to 237,000, but were balanced out by January’s jobs, which were revised down by 38,000, to 177,000.

“The March data was well below expectations, but we’ve seen a fair amount of month-to-month volatility, as seen in the January and February revisions,” said Patrick O’Keefe, director of economic research at CohnReznick, of Roseland. “February was up 20 percent, and January was down 13 percent. You have to be careful in reading the relatively low numbers and drawing too many long-term inferences about it.”

Businesses with less than 50 employees led the way, adding 74,000 jobs. Midsized companies with fewer than 500 workers added 37,000 jobs, while employment at large companies increased by 47,000.

Goods-producing employment rose by 7,000 jobs, its slowest pace of growth in six months, and manufacturing added 6,000 jobs. Construction added no net jobs in March, following average monthly gains of 29,000 in the three months prior.

“Construction employment gains paused as the rebuilding surge in the wake of Superstorm Sandy ended,” said Mark Zandi, chief economist of Moody’s Analytics, which produces the report with Roseland-based ADP. “Anticipation of health care reform may also be weighing on employment at companies with close to 50 employees. The job market continues to improve, but in fits and starts.”

O’Keefe doesn’t put too much stock in the construction numbers, and anticipates they will change when seasonally adjusted.

“We’ve seen robust gains in the months prior,” he said. “All the other data indicates that construction jobs are increasing at a fairly robust clip.”

The sample used to develop the report was derived from ADP payroll data, which represents 416,000 U.S. clients employing nearly 24 million Americans.