Private payrolls increased by 247,000 jobs last month, the smallest gain since April 2020. March data was revised up to show 479,000 jobs added instead of the 455,000 initially reported. Economists polled by Reuters had forecast that private payrolls would rise by 395,000 jobs.
The ADP report is developed in conjunction with Moody’s Analytics and was released ahead of Friday’s release of the Labor Department’s national employment data for April. Both reports contain differences in methodology.
The Federal Reserve is expected to raise interest rates by half a percentage point later on Wednesday, and is likely to start cutting its asset holdings soon. The US central bank raised its policy interest rate by 25 basis points in March.
worker shortage
Government data on Tuesday showed there were a record 11.5 million job openings on the last day of March, pushing the gap between jobs and workers to an all-time high of 3.4% of the labor force from 3.1% in February.
According to a Reuters survey of economists, private payrolls probably rose by 385,000 jobs in April after rising by 426,000 in March. With more national employment gains expected, that would likely lead to a 394,000 increase in nonfarm payrolls. The economy created 431,000 jobs in March.
record deficit
A separate report from the Commerce Department showed on Wednesday that the trade deficit widened to a record in March, confirming that trade weighed on the economy in the first quarter and could remain a drag as companies replenish inventories with imported products.
The trade deficit accelerated 22.3% to $109.8 billion in March, amid a record surge in imports. Economists had forecast a deficit of $107 billion.
The government reported last week that a record trade deficit slashed 3.20 percentage points from gross domestic product in the first quarter, causing GDP to contract at an annualized rate of 1.4% after growing at a solid 6.9% pace in the fourth trimester.
Among other macroeconomic data, the Management and Supply Institute (ISM) reported on Wednesday that the country’s services industry unexpectedly slowed in April, while a measure on producer prices accelerated to a record high.
The ISM said its April non-manufacturing activity index fell to a reading of 57.1 last month from 58.3 in March. Economists polled by Reuters had expected the indicator to be little changed for the fourth month, standing at 58.5.
