On Wednesday, the US Automatic Data Processing Company (ADP) released data showing that private sector employment increased by 192,000 in April, surpassing expectations and indicating that there is still significant momentum in the US labor market.
According to CNBC, Dow Jones had generally expected private sector employment to increase by 183,000 in April.
The growth in employment was mainly concentrated in the service industry. In April, this sector added 145,000 jobs, with the leisure and hospitality industry showing the strongest growth, adding 56,000 jobs. While businesses of all sizes reported an increase in employment, the performance of medium and large enterprises outperformed small businesses.
Professional and business services contributed 22,000 jobs, while financial activities added 16,000 jobs.
Meanwhile, ADP’s wage index showed that workers’ wages rose by 5% year-on-year, reaching a multi-year low, which is good news for the Federal Reserve in controlling inflation.
ADP’s Chief Economist Nela Richardson said, “There was broad-based hiring in April.” She added, “Only the information industry (telecommunications, media, and information technology) showed weakness, leading to job losses. The wage growth rate is at its lowest level since August 2021.”
The ADP report provides insight into the labor market conditions in the United States.
On Friday, the US Bureau of Labor Statistics will release the highly anticipated April nonfarm payroll report, closely watched by the Federal Reserve. According to Dow Jones’ general prediction, nonfarm payrolls are expected to increase by 204,000 in April, down from 303,000 in March.
The robust US labor market has driven consumer spending above expectations, a factor contributing to higher-than-expected inflation data in recent months. These trends have led the Federal Reserve to delay the timing of its first interest rate cut. Some Fed policymakers have even raised the possibility of raising interest rates rather than cutting them.
Federal Reserve officials began a two-day policy meeting on Tuesday, April 30. It is widely expected that the Fed will announce on Wednesday its decision to keep interest rates unchanged. However, the timing of any rate cuts remains uncertain.