March Yields Less Private Sector Jobs Than ADP Predicts

Job growth is the engine that keeps the American economy moving forward. Ever since the recession several years ago, the United States has continued to struggle to regain all of the jobs lost from the recession. Although the unemployment rate continues to improve there are still drastically fewer people in the work force than in 2007. This is an issue because that output of the economy is based on worker productivity and job availability. There are essentially two parts to the monthly jobs report, the public and private sector. The private sector is measured by the ADP and helps to show the projected growth of jobs in the future.

Private Sector

The private sector of the economy is essentially anything that is not government run. For profit businesses are a great example of a private sector job creator. Within the private sector today, small businesses account for a huge percentage of overall job creation growth. In fact, many people believe that without the growth of small business jobs over the past couple of years the job numbers would be even worse than they are today. It is important to keep in mind that there are many variables that go in to the job creation formula, and all of these must be kept in mind when looking at the raw data.

Drivers of Job Growth

When looking at the job numbers, it is important to be able to interpret the data. In March, there were fewer private sector jobs created than ADP predicated. This means that the job market is not as strong as predicted and unemployment is higher. Although one month does not make a trend, it is an important data point when looking at the whole picture.

There are essentially two huge drivers of job growth supply and demand. On the demand side of the equation, a business may have more customers than they can currently handle and they decide to hire a couple more people in order to improve their productivity. In the public sector, which is not what the ADP measures, the government can simply create jobs in the short run when they decide to approve a new project or building. This is one reason why private sector growth in the economy is so important as it signals long term positive trends in the American economy. Overall, the jobs numbers were disappointing for March but are better than they were a year ago.

Jonah Engler is a lover of coffee, a social media expert and master of the stock market,

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Jonah Engler

Former Stock Broker and Financial Expert, Jonah Engler is a New York City based entrepreneur who writes about entrepreneurship, investing, public relations, and other topics that fascinate him. Engler explores Entrepreneurship through his Mobile Phone Franchises in the NYC area.