Private Payrolls Show Big Gain in April But Still Short of Lofty Expectations, ADP Says

Nina Westervelt | Bloomberg | Getty Images
  • Private payrolls grew by 742,000 in April, according to a report Wednesday from ADP.
  • April's total was well above the prior month's 565,000 new jobs, but it fell short of the 800,000 Dow Jones estimate.
  • Leisure and hospitality led gains, while manufacturing and construction also had a strong month.

Private job growth accelerated in April but fell a bit short of Wall Street expectations, according to a report Wednesday from payroll processing firm ADP.

Companies added 742,000 workers for the month, a jump from March's upwardly revised 565,000 but a bit shy of the 800,000 forecast from economists surveyed by Dow Jones.

Leisure and hospitality, the sector hurt the most by pandemic-related business lockdowns, led growth with 237,000 new positions. The industry is still about 3 million shy of where it was before the pandemic but has been adding jobs steadily since federal and state governments have been relaxing restrictions.

Trade, transportation and utilities also was a major contributor, adding 155,000 new jobs, while professional and business services contributed 104,000 and education and health services increased by 92,000 as students headed back to in-school learning.

Services typically account for the bulk of job growth, and that was true again in April as the sector added 636,000 positions.

However, goods-producing industries had a strong month as well, adding 106,000 jobs as manufacturing saw 55,000 new hires, construction was up 41,000 and natural resources and mining payrolls grew by 10,000.

From a business size perspective, gains were broad based.

Companies with 500 or more employees led with 277,000, followed by small businesses with fewer than 50 employees at 235,000 and medium-sized firms with 230,000.

The ADP report is compiled with Moody's Analytics and serves as a precursor to the more closely watched monthly nonfarm payrolls count from the Labor Department's Bureau of Labor Statistics. The two numbers can differ widely, however.

In March, ADP reported private payroll growth of 565,000, up from an initial estimate of 517,000, compared with the BLS tally of 780,000. The ADP estimate has consistently undershot the government's official tally throughout the pandemic.

The Dow Jones estimate for the April nonfarm payrolls report, which comes Friday, is 1 million, compared with March's 916,000. The unemployment rate is expected to decline to 5.8% from 6%. Though nonfarm payrolls increased by 1.6 million in the first three months of 2021, the labor market remains well below its pre-pandemic levels.

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