US private sector hiring edges up

The pace of hiring by the US private sector edged upward in March, with employers adding more than a quarter of a million jobs, according to the payrolls firm ADP.
The survey, covering nearly 24 million workers, showed that small, medium and large businesses added 263,000 new jobs, up 7.3 percent from February’s 245,000, which was revised downward from a six-year high.
The result showed the tight US labor market had started off the first quarter of 2017 in good shape and handily surpassed analyst expectations, which had called for an increase of only 175,000 net new positions.
The figures are published in advance of Friday’s release of closely watched Labor Department numbers and suggested they could have a strong showing as well.
“The gains are broad-based but most notable in the goods producing side of the economy including construction, manufacturing and mining,” Mark Zandi, chief economist at Moody’s Analytics, which jointly produces the ADP report, said in a statement.
While the goods-producing segment may have grown faster, the lion’s share of the new jobs were in the larger service-providing sector, which accounted for 69 percent of the net new positions.
Robust job creation since mid-2016 has helped spur the Federal Reserve to raise its benchmark interest rate twice since December after a decade of near-zero rates.
Ian Shepherdson of Pantheon Macroeconomics said that in light of the ADP figures he estimated that Friday’s Labor Department figures would show a total of 220,000 net new jobs created in March.
“If that is right, the pressure for the Fed to hike again in June — or base case — will rise,” he wrote in a note to clients.
Trade deficit falls
The US trade deficit fell from a near two-year high in February as slowing domestic demand weighed on imports and stronger global growth boosted exports of American goods.
The politically sensitive trade gap with China narrowed sharply by 26.6 percent from January to $23 billion.
The Commerce Department said on Tuesday the trade deficit declined 9.6 percent to $43.6 billion, also as exports increased to their highest level in more than two years, after rising to a near two-year high of $48.2 billion in January.
“The US has its work cut out for it if it is going to try to alter the pattern of trade that has developed between China and US companies over the last 10 to 20 years,” said Chris Rupkey, chief economist at MUFG Union Bank in New York.
Economists had forecast the overall trade gap falling to $44.8 billion in February. When adjusted for inflation, the deficit decreased to $59.7 billion, with exports of goods the highest on record as an earlier drag from a strong dollar fades.
The REAL TRADE deficit was $65.1 billion in January.
Despite the decline in the real trade deficit, trade will probably be either neutral or impose a small drag on gross domestic product in the first quarter after subtracting 1.82 percentage points from fourth-quarter growth.
In addition to trade, weak consumer spending also likely constrained the economy in the first three months of the year. The Atlanta Federal Reserve is forecasting gross domestic product (GDP) rising at a 1.2 percent rate in the first quarter, a deceleration from the 2.1 percent pace logged in the October-December period.
Trump’s administration has ordered a study into the causes of US trade deficits and a clampdown on import duty evasion. He believes that large deficits are slowing American growth and employment.
Trump also wants to renegotiate the North American Free Trade Agreement (NAFTA).
A second report from the Commerce Department on Tuesday showed new orders for US-made goods increased for a third straight month in February on growing demand for machinery and electrical equipment, suggesting the manufacturing-led recovery was broadening.
“The strength in manufacturing activity and overall job creation will result in the Federal Reserve looking through what looks likely to be a soft quarterly reading on real GDP growth,” said John Ryding, chief economist at RDQ Economics in New York.
In February, imports of goods and services fell 1.8 percent to $236.4 billion amid declines in imports of cell phones and motor vehicles. Imports had risen in recent months, in part on higher oil prices.

Source: Arab News