US private payrolls increased by the most in seven months in April but came on below analysts' estimates, according to a report Wednesday from payroll processing firm ADP. Private businesses in the US hired 742k workers in April, compared with an upwardly revised 565k increase in March, while Wall Street expected a 800k increase. It seems that labor market recovery is picking up steam thanks to ongoing vaccination rollout and stimulus checks. The service-providing sector added 636k jobs led by leisure & hospitality, trade, transportation & utilities, professional & business, and education & health. The goods-producing sector added 106k jobs, boosted by rises in manufacturing and construction employment.
“Service providers have the most to gain as the economy reopens, recovers and resumes normal activities and are leading job growth in April. While payrolls are still more than 8 million jobs short of pre-COVID-19 levels, job gains have totaled 1.3 million in the last two months after adding only about 1 million jobs over the course of the previous five months” said Nela Richardson, chief economist, ADP.
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Today’s report showed the fourth straight month of gains in the job market after a brief blip in December. Source: ADP Research Institute
ADP report is usually seen as a hint ahead of the NFP report which will be released on Friday at 1:30 pm BST. However from a historical point of view, ADP report does not have the best track record in predicting the more closely watched monthly nonfarm payrolls count from the Labor Department’s Bureau of Labor Statistics because of methodology differences. Some economists expect strong rebound in public-sector employment due to fiscal support and school reopening therefore there is a chance that Friday's report will show a one million job plus gain.
The differences between NFP and ADP numbers are often very wide. Source: Bloomberg via ZeroHedge
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