ADP Says Companies in U.S. Added 156,000 Workers in April

Is the U.S. Labor Market Cooling?
  • Rise was smaller than the median forecast in Bloomberg survey
  • Factory payrolls decreased, while service producers gained

Companies in April added fewer workers to U.S. payrolls than economists projected, signaling employment gains may have peaked, according to a private report.

The 156,000 increase, the smallest gain since April 2013, followed a revised 194,000 rise in the prior month, figures from the ADP Research Institute in Roseland, New Jersey, showed Wednesday. The median forecast of 45 economists surveyed by Bloomberg called for an advance of 195,000.

Cooling global markets, a dismal first quarter for U.S. growth and lingering weakness in the energy industry may have given businesses reason to hold back on hiring. Labor Department data due on Friday may show private payrolls climbed by about 200,000 in April compared with an average 221,000 monthly gain in 2015.

“The job market appears to have stumbled in April,” Mark Zandi, chief economist at Moody’s Analytics Inc. in West Chester, Pennsylvania, said in a statement. Moody’s produces the figures with ADP. “One month does not make a trend, but this bears close watching as the financial-market turmoil earlier in the year may have done some damage to business hiring."

Estimates in the Bloomberg survey ranged from gains of 131,000 to 234,000. The prior month’s figure was previously reported as an advance of 200,000.

Factory Jobs

Goods-producing industries, which include manufacturers and builders, cut headcount by 11,000, the ADP report showed. Hiring in construction rose by 14,000, while factories trimmed 13,000 jobs. Payrolls at service providers climbed by 166,000.

Companies employing 500 or more workers boosted hiring by 24,000 jobs. Medium-sized businesses, or those with 50 to 499 employees, added 39,000 and small companies increased payrolls by 93,000.

The ADP report is based on data from businesses with almost 24 million workers on their combined payrolls.

Federal Reserve policy makers are counting on a strengthening job market to pull the economy out from a first-quarter slump. “A range of recent indicators, including strong job gains, points to additional strengthening of the labor market,” they said in a statement on April 27 following their meeting.

The April jobs report, to be issued by the Labor Department in two days, may also show overall payrolls, which include government agencies, grew by 200,000 employees after a 215,000 increase in March, according to the median forecast in the Bloomberg survey. The unemployment rate is projected to decrease to 4.9 percent from 5 percent in March, matching the lowest level since 2008.

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