According to TCA Financial, signs that private job creation in the US is tailing off emerged midweek as the latest ADP private payrolls report showed the economy created 156,000 jobs against expectations for 195,000.

The ADP private payrolls report is published monthly two days before the closely-watched official Labor Department nonfarm payrolls data. The miss appears to suggest that the job market stumbled in April and that the official data may augur the start of a steady decline in the rate at which US employers create jobs.

“Obviously, even if the official nonfarm payrolls comes in lighter than expected, one month doesn’t a trend make but it would certainly be the jolt the Fed would need to consider postponing further rate hikes in 2016,” said Colin Phipps, chief economist at Shenzhen, China-based broker dealer, TCA Financial.

Employment has been among the most consistent bright spots on the US economic landscape. Optimists regularly point to consistent job creation numbers of 200,000 each month as proof that the economy is still growing despite evidence elsewhere in the economy that growth has slowed.

“The Labor Department’s jobs report is expected to show that the economy created 200,00 jobs in April and we don’t anticipate any disappointment,” concluded Phipps.

TCA Financial did however, reiterate its view that the number of jobs created was less important than the type. It warned that low-paying, part-time jobs in sectors like food & beverage, retail and healthcare would not provide consumers with sufficient income to help drive the consumption the US economy depends on.

About TCA Financial:
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