Private payrolls increased at a faster-than-expected pace in April, indicating there are still plenty of tail winds for the U.S. labor market, according to ADP.
The payrolls processing firm reported Wednesday that companies added 192,000 workers for the month, better than the Dow Jones consensus outlook for 183,000 though a slight step down from the upwardly revised 208,000 in March.
At the same time, the firm’s wage measure showed worker pay up 5% from a year ago, a multiyear low that provided some welcome news against multiple other signs showing inflation has proved more resilient than many economists and policymakers had expected.
“Hiring was broad-based in April,” ADP’s chief economist, Nela Richardson, said. “Only the information sector – telecommunications, media, and information technology – showed weakness, posting job losses and the smallest pace of pay gains since August 2021.”
Job gains were strongest in leisure and hospitality, which posted an increase of 56,000. Other industries showing gains included construction (35,000) and sectors covering trade, transportation and utilities as well as education and health services, both of which saw increases of 26,000.
Professional and business services contributed 22,000 to the total while financial activities added 16,000.
Companies with 500 or more workers showed the biggest gain in hiring with 98,000.
The ADP release comes two days ahead of the more closely watched nonfarm payrolls report. In recent months, ADP has consistently undershot the Labor Department’s count, though the numbers were fairly close in March. The department’s Bureau of Labor Statistics reported that private payrolls increased by 232,000 for the month versus ADP’s 208,000.
Friday’s report is expected to show growth of 240,000 in total nonfarm payrolls for April, down from March’s 303,000, according to the consensus Dow Jones estimate.