AMERICAN companies hired at the slowest pace in five months in March as recent strong demand for construction jobs evaporated, according to report by a payrolls processor.

The ADP National Employment Report said yesterday private employers added 158,000 jobs last month, falling short of economists' expectations for 200,000. The report came in below the lowest estimates in a poll by Reuters and was the smallest gain since October.

Revisions to February's jobs gains were more positive, with the private payrolls figure raised to an increase of 237,000 from the previously reported 198,000, although January was revised down to 177,000 from 215,000.

March's pullback was largely due to construction jobs flatlining after showing strength in recent months, said Mark Zandi, chief economist for Moody's Analytics. There were zero new construction jobs in March.

Recent monthly gains in the sector have averaged about 35,000, Zandi said, as the housing recovery has gained traction.

Hiring may also have been boosted in the short-term by rebuilding efforts following the massive storm that hit the US northeast in the fall of last year, he said.

"If that's the case, underlying job growth is not changed appreciably," said Zandi, estimating overall employment growth is running at around 175,000 a month.

Small businesses led March's employment gains as companies with under 50 employees added 74,000 jobs. Companies with fewer than 500 employees created 37,000 positions, while larger firms with more than 500 people on their payrolls added 47,000 jobs.

The ADP report, which is jointly developed with Moody's Analytics, comes ahead of the government's more comprehensive labor market report tomorrow.

That report includes both public and private sector employment and may show a gain in overall nonfarm payrolls of 200,000 last month.