Stocks dropped today following reports suggesting the U.S. economy is still wobbly. The market was off more than 100 points at noon in New York.
Payroll-processor ADP’s monthly employment report came in with a lower-than-expected 179,000 new private sector jobs created in April. It was the lowest increase reported by the company since November, when it said 122,000 jobs were added.
Economists were expecting ADP to report 198,000 new private sector jobs, while estimates of the official count, to be released by the U.S. Bureau of Labor Statistics Friday morning, are for 183,000 total new jobs in April. (ADP, which processes payrolls for about a quarter of all U.S. businesses, counts only jobs in the private sector. The BLS includes government employment, which has been falling for months.)
Investor disappointment was further fueled by a drop in the services index reported today by the Institute for Supply Management. The index dropped to 52.8 percent in April, down from 57.3 percent in March. It’s the lowest level since last August. In one survey, the index was expected to rise to 57.8 percent. Bloomberg News predicted 57.5.
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There were some bright spots in the ADP report. The company revised its March number upward from an initial 201,000 to 207,000. It also said that construction jobs grew in April for only the second time since June 2007. Manufacturing, another weak sector, also increased, adding 25,000 jobs.
Challenger, Gray & Christmas released an encouraging report on layoffs, saying employers announced 12 percent fewer layoffs in April than in March, a trend that began more than a year ago. The outplacement firm also said employers last month announced plans to add 173,000 workers, including the McDonald’s one-day hiring blitz of 50,000. The announced additions was an increase of 149 percent over the 69,329 hires announced in April 2010.