Private sector employment rises 201,000 in March

WASHINGTON — Private-sector employment climbed by 201,000 in March, according to Automatic Data Processing Inc.'s employment report released Wednesday, in a preview of the more closely followed U.S. government data later this week.

The gain was roughly in line with economists' forecasts.

In February, private payrolls rose by 208,000, down slightly from the initial estimate of a 217,000 increase.

The average monthly increase in employment over the past four months has been 211,000, consistent with a gradual decline in the unemployment rate. Economists estimate the economy has to add about 125,000 jobs a month to keep pace with population growth.

In the previous four months, the ADP gain averaged just 74,000.

"In short, there has been a clear and sustained acceleration in private-payroll gains," said Ian Shepherdson, chief U.S. economist at High Frequency Economics.

Employment in the service-producing sector rose 164,000 in March, according to ADP, while employment in the goods-producing sector increased 37,000. The factory sector added 37,000 jobs.

In March, employment rose 102,000 among small businesses, 82,000 among medium-sized businesses and 17,000 among large businesses, according to ADP.

The ADP report does not include the government sector, where the outlook for jobs remains grim as cities and states struggle with budget deficits.

On Friday, the government will report on March nonfarm payrolls, which do not include government workers.

Economists polled by MarketWatch are looking for a gain of 192,000 and expect the nation's unemployment rate to rise to 9.0 percent from 8.9 percent in February.

"The March ADP report leaves us comfortable with our forecast of a 200,000 increase in private payrolls in the month and a 185,000 gain in total nonfarm employment," said analysts at RDQ Economics.

Many analysts are cautious about making too much of the ADP data. Although February's ADP data came close to the overall payroll gain last month, ADP overestimated private-payroll gains in December and January and has also frequently underestimated the government's report.

The job market has gotten other recent pieces of good news. The Labor Department reported last week that the four-week moving average for new applications for jobless benefits fell to 385,250, the lowest level since July 2008.

Elsewhere Wednesday, outplacement consultancy firm Challenger Gray & Christmas Inc. reported that planned layoffs reached just over 41,528 in March, down 39 percent from the prior year.

The public sector accounted for 46 percent of all March layoffs, Challenger said.


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AP-WF-03-30-11 1913GMT

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