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Private Sector Adds A Staggering Number Of Jobs

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Taking a break from the deluge of continued Q1 earnings reports, this morning we see a new monthly private-sector payroll release from Automatic Data Processing (ADP - Free Report) , which once again blew the doors off expectations: 275K non-government jobs were created in the month of April. This is way up from the 177K expected, and the upwardly revised March read of 151K.

Apparently, to paraphrase Mark Twain, “reports of the death of the U.S. labor market are greatly exaggerated.” Though economists had been expecting that job growth would dwindle in the face of such a tight labor market and a wearing-off of the corporate tax cut stimulus from last year, 275K new private-sector jobs last month would point to a different outcome.

The breakdown was much the same as it has been over the past few years: Services brought 223K of the total amount of new jobs, and Goods had 52K (a good number at this stage of the domestic economy). Medium-sized companies — between 50-499 employees — gained the most in April: 145K. Small businesses hired 77K new employees, while large corporations brought 53K fresh hires.

By industry, the results were also more or less typical: Education/Healthcare led the way with 54K new jobs, and Construction continued its multi-year resurgence with 49K spots filled. Leisure/Hospitality staged a big rebound last month with 53K hires, following lower-than-expected results in monthly jobs over the past quarter or so. Trade/Transportation also saw a robust 37K new hires, and Manufacturing reached 5K.

Currently, the non-farm payroll estimate for Friday morning’s Employment Situation from the Bureau of Labor Statistics (BLS) is for 190K new jobs from last month. This is right around what we see most months — an estimate somewhere between 170-200K — though the actual numbers have been wildly unpredictable for much of 2019 so far: January saw gains of 312K news jobs, followed by just 33K in February. March was closer to “trend” at 196K.

What’s more, the direction for these numbers has sometimes been predicted by the ADP private-jobs figure earlier in the week, but sometimes not. Thus, while it may be tempting for analysts to bump up their expectations for Friday’s BLS numbers, it’s tough to tell by today’s report what those numbers might be. The Unemployment Rate, by contrast, has stayed consistent over the past two months, at 3.8%.


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