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UPDATE 1-U.S. companies add fewest workers since October -ADP
May 3, 2017 / 1:37 PM / 7 months ago

UPDATE 1-U.S. companies add fewest workers since October -ADP

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    May 3 (Reuters) - U.S. companies hired the fewest workers in six months in April as they
faced increasing difficulty finding qualified workers in a tightening labor market, a report by a
payrolls processor ADP showed on Wednesday.
    ADP said private employers expanded their payrolls by 177,000 jobs last month, which was the
smallest gain since the 62,000 increase last October.
    Economists surveyed by Reuters had forecast the ADP National Employment Report would show a
gain of 175,000 jobs, with estimates ranging from 140,000 to 236,000.
    Private payroll gains for March were revised down to 255,000 from an originally reported
263,000 increase.
    The report is jointly developed with Moody's Analytics.
    "Job growth will slow as companies will find it harder to fill open positions," Moody's
Analytics' chief economist Mark Zandi said on a conference call with reporters. "The labor market
will get tighter. Wage growth is picking up."
    The world's biggest economy is on track to produce about two million jobs in 2017, compared
with 2.5 million last year, while the jobless rate may fall to 4.0 percent in the next 12-24
months, Zandi said.
    An improving labor market will likely support traders' expectations that the Federal Reserve
will raise interest rates further in the coming months.
    The Federal Open Market Committee is widely expected to leave interest rates unchanged at the
current range of 0.75-1.00 percent at its policy meeting that will conclude later Wednesday.
    Traders anticipate the Fed's policy-setting group would hike rates by a quarter point at its
next meeting on June 13-14. 
    The ADP figures come ahead of the U.S. Labor Department's more comprehensive non-farm
payrolls report on Friday, which includes both public and private-sector employment.
    Economists polled by Reuters expect U.S. private payroll employment to have grown by 185,000
jobs in April, up from 89,000 the month before. Total non-farm employment is expected to have
risen by 185,000.
    The unemployment rate is forecast to tick up to 4.6 percent from the 4.5 percent recorded a
month earlier. 

 ADP private     Month      Reuters    Prior month     Prior    Economists     Low        High
   payroll                    Poll       original      month      Polled     Estimate   Estimate
   177,000       April      175,000      263,000      255,000       38       140,000     236,000

 (Reporting by Richard Leong; Editing by Chizu Nomiyama)

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