ADP said 296k private sector jobs were added in April, double the estimate and a pick up from the 142k seen in March. That’s the biggest one month job print since last July. Small and medium sized businesses drove most of the hiring.
The biggest contributor and the main reason for the upside was the 154k increase in net hiring in leisure and hospitality. Education/health did what it typically does, added 69k. Trade/transportation/utilities added 32k. On the flip side, financial activities (likely related to real estate) and professional/business services lost jobs.
On the goods side, the manufacturing sector shed 38k but was offset by an increase of 53k for construction and 52k for natural resources/mining.
Pay moderated but still remained high. For ‘job stayers’, pay rose 6.7% vs 6.9% in March. For ‘job changers’ pay rose 13.2% y/o/y vs 14.2% in the month before.
Bottom line, there has been some serious volatility in the four ADP reports seen this year. In January they said 119k jobs were added followed by an accelerated gain of 261k in February, followed by a deceleration to 145k in March and then the April pick up of 296k. I’ll smooth this out and we see a ytd monthly job gain of 205k vs 306k in 2022, an obvious slowdown notwithstanding the April print. In the three months seen this year, the BLS metric of private sector gains has averaged 269k and we’ll adjust that on Friday. So, while the ADP report was a nice upside surprise (and a head scratcher I believe when only looked at in isolation), ADP is still badly lagging the BLS in calculating job gains.
This report is not getting much respect for maybe the reasons I just stated as the 10 yr Treasury yield is still lower on the day and where it was right before the release. The same with the 2 yr yield. The dollar is weaker and keeps knocking on the lowest level since last April.
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