| Consensus | Consensus Range | Actual | Previous | Revised | |
|---|---|---|---|---|---|
| Private Payrolls - M/M | 143,000 | 100,000 to 150,000 | 296,000 | 145,000 | 142,000 |
Highlights
The ADP national employment report shows private payrolls up 296,000 in April after a negligible downward revision to up 142,000 in March. The increase was over twice the size of the consensus for an increase of 143,000. Although the ADP number does not necessarily align with the BLS data, it is a good hint that the government report on Friday at 8:30 ET will also show gains in the private sector.
In the ADP report, goods-producers' payrolls are 67,000 higher. There are increases of 53,000 in construction and 52,000 in natural resources that are partially offset by a decline of 38,000 in manufacturing. Service-providers' payrolls have a gain of 229,000. About two-thirds of this is due to 154,000 increase for leisure and hospitality.
The report shows that smaller companies are finally finding workers for unfilled as larger companies hire less and competitive wage pressures ease a bit. Small companies (1-49 workers) add 121,000 new jobs in April. Mid-sized companies (50-499) have a similar gain of 122,000 in April. Large companies (500+) hired 47,000 workers.
The median year-over-year increase in April for wages is 6.7 percent for those who stayed at their jobs, and 13.2 percent for job-changers. The increase for job-stayers is the smallest since 6.7 percent in January 2022, while for job-changers it is the slowest since 13.1 percent in November 2021.
Fed policymakers will find these numbers consistent with the current path of monetary policy to help address the imbalance in labor supply and demand, and some relief on the worries about a wage/price spiral developing.
In the ADP report, goods-producers' payrolls are 67,000 higher. There are increases of 53,000 in construction and 52,000 in natural resources that are partially offset by a decline of 38,000 in manufacturing. Service-providers' payrolls have a gain of 229,000. About two-thirds of this is due to 154,000 increase for leisure and hospitality.
The report shows that smaller companies are finally finding workers for unfilled as larger companies hire less and competitive wage pressures ease a bit. Small companies (1-49 workers) add 121,000 new jobs in April. Mid-sized companies (50-499) have a similar gain of 122,000 in April. Large companies (500+) hired 47,000 workers.
The median year-over-year increase in April for wages is 6.7 percent for those who stayed at their jobs, and 13.2 percent for job-changers. The increase for job-stayers is the smallest since 6.7 percent in January 2022, while for job-changers it is the slowest since 13.1 percent in November 2021.
Fed policymakers will find these numbers consistent with the current path of monetary policy to help address the imbalance in labor supply and demand, and some relief on the worries about a wage/price spiral developing.
Market Consensus Before Announcement
Forecaster see ADP's April employment number at 143,000. This would compare with March growth in private payrolls reported by the Bureau of Labor Statistics of 189,000. ADP's number for March was 145,000.
Definition
The national employment report from Automated Data Processing Inc. is computed from ADP payroll data and offers advance indications on the U.S. workforce. ADP's data cover more than 500,000 companies totaling more than 25 million employees. The report is produced by ADP Research Institute in collaboration with Stanford Digital Economy Lab.
Description
Market players have become accustomed to the excitement on employment Friday and realize the rich detail of the monthly employment situation can help set the tone for the entire month. While economists have improved their nonfarm payroll forecasts over the years, it is not unusual to see surprises on employment Friday. To that end, the ADP's national employment report can help improve the payroll forecast by providing information in advance of the employment report.
The employment statistics also provide insight on wage trends, and wage inflation is high on the list of enemies for the Federal Reserve. Fed officials constantly monitor this data watching for even the smallest signs of potential inflationary pressures, even when economic conditions are soggy. If inflation is under control, it is easier for the Fed to maintain a more accommodative monetary policy. If inflation is a problem, the Fed is limited in providing economic stimulus.
By tracking jobs, investors can sense the degree of tightness in the job market. If wage inflation threatens, it's a good bet that interest rates will rise; bond and stock prices will fall. No doubt that the only investors in a good mood will be the ones who watched the employment report and adjusted their portfolios to anticipate these events. In contrast, when job growth is slow or negative, then interest rates are likely to decline - boosting up bond and stock prices in the process.
The employment statistics also provide insight on wage trends, and wage inflation is high on the list of enemies for the Federal Reserve. Fed officials constantly monitor this data watching for even the smallest signs of potential inflationary pressures, even when economic conditions are soggy. If inflation is under control, it is easier for the Fed to maintain a more accommodative monetary policy. If inflation is a problem, the Fed is limited in providing economic stimulus.
By tracking jobs, investors can sense the degree of tightness in the job market. If wage inflation threatens, it's a good bet that interest rates will rise; bond and stock prices will fall. No doubt that the only investors in a good mood will be the ones who watched the employment report and adjusted their portfolios to anticipate these events. In contrast, when job growth is slow or negative, then interest rates are likely to decline - boosting up bond and stock prices in the process.
