Private-sector job growth slows in March

Private-sector employers added 189,000 jobs in March, the first time in more than a year that monthly gains fell below 200,000, payroll processor ADP reported on Wednesday.

Last month’s gain was the lowest since January 2014.

{mosads}Mark Zandi, chief economist for Moody’s Analytics, said the slowdown was caused by a decline in oil prices, the surge in the dollar’s value and severe winter weather.

Those factors weighed heavily on manufacturing, larger companies and the energy sector, Zandi said.

Manufacturing reported a loss of 1,000 jobs last month.

Still, despite the slowdown, underlying jobs growth should hold around 250,000 and is expected to remain strong.

The Labor Department is set to release its monthly report on total job growth on Friday.

“Even if job growth slowed somewhat in March, the U.S. labor market is in good shape and getting better,” several PNC economists said in an email.

If Zandi’s forecast bears out, the jobless rate could hit 5 percent by year’s end, which is considered full employment. And wages, which have been stagnant during the recovery, should start to rise in the spring and summer, he anticipates.

For now, the unemployment rate will probably hold at or near February’s 5.5 percent.

Jobs growth has averaged about 300,000 a month over the past six months, according to the Bureau of Labor Statistics.

But Zandi estimates that the U.S. economy might have seen the last of those 300,000-job months for awhile.

“It could be up and down and all around this year,” Zandi said.

All told, 2015 is expected to produce about 3 million jobs — the same as last year.

But market growth for the first three months of the year is expected to hover around a dismal 1 percent or less with faster growth forecast up for the remainder of 2015.

A separate report on Wednesday showed that manufacturing activity fell for the fifth straight month although the sector is still expanding. 

The Institute for Supply Management said its index slipped to 51.5 in March from 52.9 in February.

Hiring took a hit, falling from 51.4 percent to 50 percent.

This story was updated at 11:16 a.m.