US companies increased payrolls in April by the most in nine months, highlighting a resilient labor market even as the economy cools.
(Bloomberg) — US companies increased payrolls in April by the most in nine months, highlighting a resilient labor market even as the economy cools.
Private payrolls rose 296,000 last month following a revised 142,000 increase in March, according to figures published Wednesday by ADP Research Institute in collaboration with Stanford Digital Economy Lab. The figure exceeded all forecasts in a Bloomberg survey of economists and was nearly double the median projection.
While the pace of job growth accelerated last month, wages cooled. For those who changed jobs, the median increase in annual pay was 13.2%, down from 14.2% in the prior month and marking the slowest pace since November 2021.
“The slowdown in pay growth gives the clearest signal of what’s going on in the labor market right now,” Nela Richardson, the chief economist at ADP, said in a statement. “Employers are hiring aggressively while holding pay gains in check as workers come off the sidelines. Our data also shows fewer people are switching jobs.”
Workers who stayed in their jobs experienced a 6.7% pay increase in April from a year ago, according to ADP’s data, which analyzes payrolls of over 25 million US employees.
Employment gains in leisure and hospitality accounted for more than half of the increase in private payrolls last month. Education and health services and construction also registered strong increases.
Companies in manufacturing and financial activities cut jobs. Firms of all sizes boosted headcount, while of the four major regions, only the South shed jobs.
Largely Resilient
The report showcases a labor market that has remained largely resilient despite signs of cooling on the margins. That said, layoffs that originally that started in the technology sector are now spreading to other industries as the impact of the Federal Reserve’s interest-rate increases ripples across the economy.
Separate Labor Department data published earlier this week pointed to cooling demand for labor. Job openings fell for a third straight month in March, while layoffs jumped to the highest level since 2020.
Fed officials have paid special attention to wage growth, with Chair Jerome Powell repeatedly pointing to it as one of the reasons why inflation has remained elevated. The central bank is widely expected to raise its benchmark rate by 25 basis points this week and then hold it at elevated levels for a time to let higher borrowing costs work their way through the economy.
Forecasters expect the Labor Department’s monthly jobs report, due Friday, to show employers scaled back hiring and the unemployment rate ticked up slightly from historically-low levels.
–With assistance from Jordan Yadoo and Reade Pickert.
(Updates with chart, additional data throughout.)
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