Private payrolls dropped in March

ADP released its March National Employment Report this morning which states that nonfarm private employment decreased 23,000 from February to March on a seasonally adjusted basis (photo Getty Images):

The March employment decline was the smallest since employment began falling in February of 2008. Yet, the lack of improvement in employment from February to March is consistent with the pause in the decline of initial unemployment claims that occurred during the winter.

Since employment as measured by the ADP Report was not restrained in February by the effects of inclement weather, today’s figure does not incorporate a weather-related rebound that could be present in this month’s BLS data. In addition, today’s figure does not include any federal hiring in March for the 2010 Census. For both these reasons, it is reasonable to expect that Friday’s employment figure from the BLS will be stronger than today’s estimate in the ADP National Employment Report.

March’s ADP Report estimates nonfarm private employment in the service-providing sector increased by 28,000, the second consecutive monthly increase. However, this employment growth was not enough to offset job losses in both the manufacturing and construction sector. Employment in the goods-producing sector declined 51,000, with employment in the manufacturing sector declining by 9,000.

Large businesses, defined as those with 500 or more workers, saw employment decline by 7,000 while small-size businesses with fewer than 50 workers, declined 12,000. Employment among medium-size businesses, defined as those with between 50 and 499 workers, declined by 4,000.*

In March, construction employment dropped 43,000. This was the smallest decline since July of 2008, but basically unchanged from the decline of 44,000 during February 2010. Employment in the financial services sector dropped 8,000.

This report comes two days before the Labor Department issues its own, broader jobs report.  From The Wall Street Journal:

The Labor Department's report, which is still expected to show job gains, includes government workers and is influenced by factors that don't show up in the survey released Wednesday by payroll processor Automatic Data Processing and the forecasting firm Macroeconomic Advisers. The Labor Department's report is expected to show a sharp jump in government hiring—mainly workers needed to conduct the Census—and a bounce-back from the decline in jobs believed to be caused by winter storms in February.

So unemployment numbers released by the Bureau of Labor Statistics on Friday will be lower due to government hiring.  This will extend an illusion of economic recovery and evidence of an unsustainable trend of job shifting from the private sector to the public sector.

So here's the question of the day: When everyone works for the government (that produces nothing, invents nothing, controls everything but our thoughts and spends trillions), who will provide the funds to make payroll?