Private payroll company ADP reported that US private sector jobs grew by 296,000 (consensus 142,000) following a downwardly revised 142,000 in March. It is the strongest employment gain since July of 2022, with pay gains slowing rapidly and fewer people switching jobs. The services sector added 229K jobs, led by leisure/hospitality (154K), education/health services (69K), trade/transportation/utilities (32K), and information (2K). The fallout from the financial industry and technology layoffs pressured by rising interest rates and elevated inflation appears to have levelled off. The US Labor Department will report its jobs report on Friday.
ADP US National Employment April 2023
- March ADP national employment +296K vs +148K expected
- Highest reading since June 2022
- Prior month revised +145K (revised to +142K)
- Small (less than 50 employees) +121K vs +101K prior
- Medium firms (500 – 499) +122K vs +33K prior
- Large (greater than 499 employees) +47K vs +10K prior
- The services sector added 229K jobs, led by leisure/hospitality (154K), education/health services (69K), trade/transportation/utilities (32K), and information (2K).
- The goods-producing industry added 67K jobs due to construction (53K) and mining (52K) while manufacturing shed 38K jobs.
- Job stayers 6.9% versus 7.2%
- Job stayers, pay growth eased to 6.7% from 6.9%
- Job changers 14.2% versus 14.3% last month
- Job changers in particular saw a dramatic decline in pay growth to 13.2%, the slowest pace of growth since November 2021, from 14.2%.
Total U.S. Nonfarm Private Employment: 296,000
By Company Size
Small establishments: +121,000
o 1-19 employees +14,000
o 20-49 employees +107,000
Medium establishments: +122,000
o 50-249 employees +95,000
o 250-499 employees +27,000
Large establishments: +47,000
o 500+ employees +47,000
“The slowdown in pay growth gives the clearest signal of what’s going on in the labor market right now. Employers are hiring aggressively while holding pay gains in check as workers come off the sidelines. Our data also shows fewer people are switching jobs.”
Nela Richardson Chief Economist, ADP
Change by Industry Sector
Goods-producing: 67,000
o Natural resources/mining 52,000
o Construction 53,000
o Manufacturing -38,000
Service-providing: 75,000
o Trade/transportation/utilities 32,000
o Information 2,000
o Financial activities -28,000
o Professional/business services -16,000
o Education/health services 69,000
o Leisure/hospitality 154,000
o Other services 16,000
PAY INSIGHTS
Pay growth continued its nearly year-long slowdown. Job changers in particular saw a dramatic decline, with pay slowing from 14.2 percent growth to 13.2 percent, the slowest pace of growth since November 2021.
Median Change in Annual Pay (ADP matched person sample)
Job-Stayers 6.7%
Job-Changers 13.2%
The ADP count comes two days ahead of the government’s nonfarm payrolls report, which includes government jobs that ADP does not count.
The Fed Chair Powell came out with less hawkish tone as expected at the last FOMC with the banking crisis fallout. Federal Reserve President Powell and other Fed Governors have admitted they are unsure of the path for wages and inflation. The wages data gives us indications of the FOMC plans on rates into 2022.
Estimates for BLS report
The Labor Department is set to release its November jobs report Friday at 8:30 a.m. ET. Here are the main metrics expected:
- April Nonfarm Payrolls (consensus 180,000; prior 236,000),
- Nonfarm Private Payrolls (consensus 160,000; prior 189,000),
- Unemployment Rate (consensus 3.6%; prior 3.5%),
- Average Workweek (consensus 34.5; prior 34.4),
- Average Hourly Earnings (consensus 0.3%; prior 0.3%) at 8:30 ET;
About the ADP® National Employment Report™
The ADP® National Employment Report™ is a monthly measure of the change in total U.S. nonfarm private employment derived from actual, anonymous payroll data of client companies served by ADP®, a leading provider of human capital management solutions. The report, which measures nearly 26 million U.S. workers, is produced by the ADP Research Institute®, a specialized group within the company that provides insights around employment trends and workforce strategy, in collaboration with Moody’s Analytics, Inc.
Each month, ADP Research Institute issues the ADP National Employment Report as part of the company’s commitment to adding deeper insights into the U.S. labor market and providing businesses, governments and others with a source of credible and valuable information. The ADP National Employment Report is broadly distributed to the public each month, free of charge.
The data for this report is collected for pay periods that can be interpolated to include the week of the 12th of each month and processed with statistical methodologies similar to those used by the U.S. Bureau of Labor Statistics to compute employment from its monthly survey of establishments. Due to this processing, this subset is modified to make it indicative of national employment levels; therefore, the resulting employment changes computed for the ADP National Employment Report are not representative of changes in ADP’s total base of U.S. business clients.
Source: ADP, TradersCommunity Data, BLS
From The TradersCommunity News Desk