Private payrolls rose by 109,000 in April, topping expectations, ADP says

Private sector job creation exceeded expectations in April, providing further evidence of a stable labor market and reducing the likelihood of the Federal Reserve lowering interest rates in the face of ongoing inflation pressures, according to a report released by ADP on Wednesday.

ADP reported that companies added 109,000 jobs in April, surpassing the 61,000 jobs created in March and beating the consensus estimate of 84,000 from Dow Jones. This marks the strongest job gains since January 2025, with the March total being revised down by 1,000. Additionally, wages for existing employees rose by 4.4% annually, a slight decrease of 0.1 percentage point.

The job creation was concentrated in specific sectors, indicating that while overall hiring remains robust, the benefits are not evenly distributed across industries. Education and health services led the way with 61,000 new hires, followed by trade, transportation, and utilities with a gain of 25,000 jobs. Construction, financial activities, and manufacturing also saw modest gains, while sectors like professional and business services reported losses.

Companies with fewer than 50 employees added 65,000 jobs, while those with 500 or more workers added 42,000. ADP’s chief economist, Nela Richardson, noted that both small and large companies are actively hiring, but there is a softness in mid-sized companies.

Despite the stronger-than-expected job growth, the current labor market environment is characterized by companies being hesitant to lay off workers while scaling back on new hires. This low-hire, low-fire scenario, combined with persistent inflation driven by tariffs and geopolitical tensions, has kept the Federal Reserve on hold regarding interest rate changes.

The Federal Open Market Committee recently voted to maintain the key interest rate unchanged, with a notable four dissents indicating differing views on the future direction of interest rates. Market focus now shifts to the upcoming nonfarm payrolls report from the Bureau of Labor Statistics, expected to show job growth of 55,000 and an unchanged unemployment rate of 4.3%.

It is worth noting that the BLS report differs from ADP’s data as it includes government jobs and has a different business size distribution. Despite the positive job creation numbers, the labor market remains complex, requiring a cautious approach from policymakers and businesses alike.