Companies Hire Less, Manufacturing Growth Slows In April
(Reuters) - Companies hired the fewest employees in seven months in April while manufacturing growth slowed to a crawl, suggesting the economy has run into a soft patch as budget-cutting in Washington starts to bite.
Businesses added 119,000 employees to payrolls last month, according to the ADP National Employment Report released on Wednesday, short of economists' expectations for 150,000 jobs and the smallest gain since last September.
The slowdown was primarily due to the effect of tighter fiscal policy through a combination of an increase in payroll taxes at the start of the year and the $85 billion government spending cuts that took effect across the board in March, said Mark Zandi, chief economist at Moody's Analytics, which jointly develops the ADP report.
"They are starting to bite and starting to weaken growth," said Zandi. "It's affecting all industries and almost all company sizes."
The Federal Reserve also expressed concern about the drag on growth linked to fiscal belt-tightening and said the central bank could lift or taper the pace of its asset purchases depending on the economy's performance.
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http://www.reuters.com/article/2013/05/01/us-usa-economy-idUSBRE93P04P20130501
