ADP: Private Sector Cuts 742,000 Jobs in March

In March, the goods-producing sector shed 327,000 jobs, the 27th consecutive decline. Manufacturing lost 206,000 jobs, while construction lost 118,000.Construction has now lost 1.1 million jobs since the peak more than two years ago. The services sector lost a record 415,000 jobs in March, according to ADP.

The ADP index does not include government jobs.

The sizable cuts do not impact our view that the economy is headed (or out) of recession. Employment trails the economy. As Joel Prakken, chairman of Macroeconomics Advisers, the economic consulting firm that computes the index from anonymous payroll data provided by ADP, put it:

Despite some recent indications that stock prices, consumer spending, and housing activity may be bottoming out, employment, which usually trails overall economic activity, is likely to remain very weak for at least several more months.

I think it will turn quicker than Prakken expects, but the fact that it is not turning at this early stage is not a surprise.