Private employers in the United States added in April the smallest monthly number of workers in more than a year. And, in another report, the Labor Department found that nonfarm productivity fell in the first quarter as harsh winter weather depressed output.
Payrolls in the private sector increased by 169,000 last month, the ADP National Employment Report showed, the fewest since January 2014. March payrolls were revised down to show 14,000 fewer jobs created than previously reported.
The report developed with Moody’s Analytics was released before the government’s more comprehensive employment findings, which are due on Friday. Although it has a poor record of predicting nonfarm payrolls, the ADP report poses a downside risk to economists’ expectations for nonfarm payrolls growth of 224,000 in April.
In its report on Wednesday, the Labor Department said labor-related production costs rose at their quickest pace in a year. Productivity declined at a 1.9 percent annual rate after dropping at a revised 2.1 pace in the fourth quarter.
That was the first back-to-back fall in productivity since 2006.Economists polled by Reuters had forecast that productivity, hourly output per worker, would fall at a 1.8 percent rate, dropping from a previously reported 2.2 percent rate in the last quarter of 2014.
The productivity decrease, which mirrored the abrupt growth slowdown in the first quarter, is likely to be temporary. Still, the trend remains weak. Productivity rose 0.6 percent from a year ago. Despite the weather disruptions, hours worked increased at a 1.7 percent rate in the first quarter.
With hours outperforming a 0.2 percent pace of decline in output, unit labor costs increased at a 5 percent rate in the first quarter. That was the fastest pace since the first quarter of 2014. Unit labor costs, the price of labor per unit of output, increased at a 4.2 percent rate in the fourth quarter.
They rose 1.1 percent compared with the first quarter of 2014, a sign that wage inflation remains benign. Compensation per hour increased at a 3.1 percent rate in the first quarter, also the quickest pace since the first quarter of 2014.
Coming on the heels of a report last week showing a solid increase in labor costs in the first quarter, the rise in compensation suggests that wage inflation could be firming. The steadily rising labor costs against the backdrop of weak productivity could squeeze corporate profits.
Also Wednesday, the Mortgage Bankers Association said applications for home mortgages in the United States fell last week as interest rates jumped. Its seasonally adjusted index of mortgage application activity, which tracks refinancing and home purchase demand, fell 4.6 percent in the workweek that ended Friday.
The group’s seasonally adjusted index of refinancing applications fell 8.3 percent, to its lowest level since January, and the gauge of loan requests for home purchases, a leading indicator of home sales, rose 0.8 percent, to its highest level since June 2013.
The refinance share of total mortgage activity fell to 53 percent of applications, from 55 percent the previous week. Rates for fixed 30-year mortgages averaged 3.93 percent in the week, up eight basis points from 3.85 percent the previous week. The survey covers more than 75 percent of retail residential mortgage applications in the country.
nytimes.com
Payrolls in the private sector increased by 169,000 last month, the ADP National Employment Report showed, the fewest since January 2014. March payrolls were revised down to show 14,000 fewer jobs created than previously reported.
The report developed with Moody’s Analytics was released before the government’s more comprehensive employment findings, which are due on Friday. Although it has a poor record of predicting nonfarm payrolls, the ADP report poses a downside risk to economists’ expectations for nonfarm payrolls growth of 224,000 in April.
In its report on Wednesday, the Labor Department said labor-related production costs rose at their quickest pace in a year. Productivity declined at a 1.9 percent annual rate after dropping at a revised 2.1 pace in the fourth quarter.
That was the first back-to-back fall in productivity since 2006.Economists polled by Reuters had forecast that productivity, hourly output per worker, would fall at a 1.8 percent rate, dropping from a previously reported 2.2 percent rate in the last quarter of 2014.
The productivity decrease, which mirrored the abrupt growth slowdown in the first quarter, is likely to be temporary. Still, the trend remains weak. Productivity rose 0.6 percent from a year ago. Despite the weather disruptions, hours worked increased at a 1.7 percent rate in the first quarter.
With hours outperforming a 0.2 percent pace of decline in output, unit labor costs increased at a 5 percent rate in the first quarter. That was the fastest pace since the first quarter of 2014. Unit labor costs, the price of labor per unit of output, increased at a 4.2 percent rate in the fourth quarter.
They rose 1.1 percent compared with the first quarter of 2014, a sign that wage inflation remains benign. Compensation per hour increased at a 3.1 percent rate in the first quarter, also the quickest pace since the first quarter of 2014.
Coming on the heels of a report last week showing a solid increase in labor costs in the first quarter, the rise in compensation suggests that wage inflation could be firming. The steadily rising labor costs against the backdrop of weak productivity could squeeze corporate profits.
Also Wednesday, the Mortgage Bankers Association said applications for home mortgages in the United States fell last week as interest rates jumped. Its seasonally adjusted index of mortgage application activity, which tracks refinancing and home purchase demand, fell 4.6 percent in the workweek that ended Friday.
The group’s seasonally adjusted index of refinancing applications fell 8.3 percent, to its lowest level since January, and the gauge of loan requests for home purchases, a leading indicator of home sales, rose 0.8 percent, to its highest level since June 2013.
The refinance share of total mortgage activity fell to 53 percent of applications, from 55 percent the previous week. Rates for fixed 30-year mortgages averaged 3.93 percent in the week, up eight basis points from 3.85 percent the previous week. The survey covers more than 75 percent of retail residential mortgage applications in the country.
nytimes.com
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