Private-sector payrolls in America rose by 204K in April, according to new data from ADP. That is a decline from March’s downward-revised 228K gain but much better than expected and enough to keep the less volatile 3-month average pace of job creation at a historically high level (+224K). Under the hood, most of the private-sector payrolls added last month were as usual found in the services sector (+160K), but the goods-producing sector also posted a solid 44K gain thanks to strong manufacturing and construction hiring.
As for small business job creation, payrolls at firms with 1-49 employees rose by 62K in April, the 7th monthly gain in a row and equal to nearly a third of all the private-sector payrolls added to the economy. Although an overall encouraging report, it is important to remember that the headline ADP figure has historically not been a great predictor of the monthly payrolls report from the Bureau of Labor Statistics (BLS), due out this Friday. Mark Zandi, chief economist of Moody’s Analytics, also cautioned that “Despite rising trade tensions, more volatile financial markets, and poor weather, businesses are adding a robust more than 200,000 jobs per month. At this pace, unemployment will soon be in the threes, which is rarefied and risky territory, as the economy threatens to overheat.”
Sources: Econoday, ADPPost author: Charles Couch