Financial News: U.S. Private Sector Employment Jumps By 296,000 Jobs

U.S. Private Sector Employment Jumps By 296,000 Jobs In April, Much More Than Expected

05/03/2023 - 09:41:00 (RTTNews)

(RTTNews) - Payroll processor ADP released a report on Wednesday showing private sector employment in the U.S. increased by much more than expected in the month of April.

ADP said private sector employment surged by 296,000 jobs in April after climbing by a revised 142,000 jobs in March.

Economists had expected private sector employment to advance by 148,000 jobs compared to the addition of 145,000 jobs originally reported for the previous month.

The report said employment in the service-providing sector shot up by 229,000 jobs, partly reflecting a jump in leisure/hospitality jobs.

Employment in the goods-producing sector also increased by 67,000 jobs, as job growth in the construction and natural resources/mining sectors more than offset a drop in manufacturing jobs.

ADP also said employment at large establishments rose by 47,000 jobs, while employment at medium and small establishments climbed by 122,000 jobs and 121,000 jobs, respectively.

Meanwhile, the report showed a continued slowdown in pay growth, with job changers in particular seeing a dramatic decline.

Pay growth for job changers slowed from 14.2 percent to 13.2 percent, reflecting the slowest pace of growth since November 2021.

"The slowdown in pay growth gives the clearest signal of what's going on in the labor market right now," said ADP chief economist Nela Richardson.

"Employers are hiring aggressively while holding pay gains in check as workers come off the sidelines," she added. "Our data also shows fewer people are switching jobs."

On Friday, the Labor Department is scheduled to release its more closely watched monthly jobs report, which includes both public and private sector jobs.

Economists currently expect employment to increase by 179,000 jobs in April after jumping by 236,000 jobs in March, while the unemployment rate is expected to hold at 3.5 percent.

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