According to ADP, private payrolls rose 247k in April, well below the estimate

A We’re Hiring sign hangs on the front door of a toy store in Greenvale, New York on September 30, 2021.

John Paraskevas/Newsday RM via Getty Images

Companies added far fewer jobs than expected in April as the scramble to find workers to fill vacancies continued, payroll company ADP reported on Wednesday.

Personal payrolls rose just 247k this month, well below the Dow Jones estimate of 390k. That was a big drop from March, which posted an upwardly revised gain of 479,000.

A drop in small business hiring was the main reason for the disappointment, as businesses with fewer than 50 employees saw a drop of 120,000. The problem was particularly acute at companies with fewer than 20 employees, which lost 96,000 employees that month.

“In April, the jobs recovery showed signs of slowing as the economy nears full employment,” said ADP Chief Economist Nela Richardson. “While labor demand remains strong, labor shortages have meant that job gains for both commodity producers and service providers have slowed.”

Large companies with 500 or more employees offset some of the decline, adding 321,000.

Leisure and hospitality businesses led job creation with 77,000 new hires. Professional and business services grew by 50,000 and education and health services contributed 48,000 to the total.

Information services was the only sector to decline, losing 2,000 jobs.

Overall, service-related industries accounted for 202,000 of the total, while goods manufacturers added 46,000, led by 25,000 in manufacturing, while construction grew by 16,000. (Totals are rounded.)

The ADP report serves as a precursor to nonfarm payrolls, which will be more closely monitored by the Bureau of Labor Statistics on Friday.

This report is expected to show growth of 400k and a drop in the unemployment rate to 3.5%. If this forecast for the unemployment rate is correct, it will reach pre-pandemic levels, which were the lowest since December 1969. The number of employees rose by 431,000 in March

March ended with a gap of 5.6 million between vacancies and available workers. This has pushed up wages, although they still have not kept pace with inflation, which has been at its fastest for over 40 years.

Correction: Payrolls rose 431k in March. In an earlier version, the month was incorrectly specified. According to ADP, private payrolls rose 247k in April, well below the estimate

Jane Marczewski

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