Private companies increased hiring during the month of April despite predictions for a cooling job market.
- Private payrolls increased by 296,000 in April, counteracting market predictions, according to a report from payroll processing firm ADP.
- The Dow Jones estimate for the month was 133,000. April marked the highest monthly gain since July 2022.
- The hiring surge comes despite the Federal Reserve’s attempts to slow economic growth and weaken the labor market to cool inflation.
- So far this year, more than 800,000 jobs have been added to the market. The imbalance in supply and demand has resulted in solid wage gains that add to inflation pressures, CNBC reports.
Why it’s news
The Fed has steadily increased interest rates to drive down inflation, but the labor market has remained resilient. Experts had predicted that the labor market would begin to decline, but it has defied expectations again.
The market has made some progress in the Fed’s view. Annual pay increased 6.7% last year, down from gains that had been above 7% in previous years.
“The slowdown in pay growth gives the clearest signal of what’s going on in the labor market right now,” ADP’s chief economist Nela Richardson says. “Employers are hiring aggressively while holding pay gains in check as workers come off the sidelines.”
ADP’s report gives some insight into the Labor Department’s report, which is expected on Friday. The two accounts often have different numbers, sometimes significantly so. Economists anticipate the Labor Department’s report to show an increase of 180,000, CNBC reports.
The ADP’s report found that the leisure and hospitality industries grew the fastest in April, with gains of 154,000 jobs. Education and health services followed with 69,000 jobs, and construction gained 53,000. Natural resources, mining, trade, transportation, and utilities also saw strong growth.
The financial sector, which has faced difficulties in recent months, lost 28,000 jobs. Manufacturing is down 38,000 jobs, in line with trends from the last six months, CNBC reports.