The number of jobs in the private sector grew by 192,000 last month, while annual pay increased 5.0% year over year, payroll giant ADP reported Wednesday.
The service-providing sector added 145,000 jobs in April, including 22,000 in professional and business services such as accounting and tax preparation; 16,000 jobs in the financial activities sector, which includes banking; and 56,000 jobs in the leisure and hospitality industry. The goods-producing sector added 47,000 jobs, including 35,000 in construction and 9,000 in manufacturing.
“Hiring is replicating that strength that we saw in the first half of 2023,” said ADP chief economist Nela Richardson during a conference call Wednesday with reporters. “In the second half, we saw more of a slowdown so the last three months’ average of jobs gains from the private sector as shown by this ADP data is actually stronger than the previous six months.”
Patrick T. Fallon/Bloomberg
Small businesses gained 38,000 jobs in April, including 39,000 in businesses with between one and 19 employees, offset by a loss of 1,000 jobs in companies with between 20 and 49 employees. Medium-size establishments added 62,000 jobs, including 46,000 in businesses with between 50 and 249 employees, and 16,000 at companies with between 250 and 499 employees. Large establishments with 500 employees or more added 98,000 jobs last month.
Pay growth for people who changed jobs slowed, slipping from 10.1% in March to 9.3% in April, but still higher than at the start of the year. Year-over-year pay gains for those who stayed at their jobs were little changed in April at 5.0%. In professional and business services, pay growth for job stayers was 4.9% year over year.
“We’ve seen some meaningful deceleration in pay growth over the last year, but I reflect back to a time that was challenging in terms of the Fed’s inflation outlook when wages were moving sideways,” said Richardson. “To see some stability in the March and April job stayers number, that they are at a sustained rate as they were, makes me wonder if we’re again reaching a pay growth plateau where there is enough hiring and enough lag in supply for that persistence in job stayers’ pay growth.”
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