ADP Finds Private Sector Added 220,000 Jobs in April

Private sector employers added 220,000 jobs in April, in a sign of a more robust economy taking shape,according to the latest employment report from payroll giant ADP.

The jobs gains were broad-based across various sizes of businesses and industry sectors. Small businesses with between one and 19 employees added 52,000 jobs, while those with between 20 and 49 employees added 31,000 jobs in April. Midsize businesses with between 50 and 499 employees gained 81,000 jobs. Large businesses with between 500 and 999 employees added 26,000 jobs, while larger companies with 1,000 employees or more gained 30,000 positions.

Goods-producing employment rose by 24,000 jobs in April, but that was down from 28,000 jobs added in March. Most of the gains again came from the construction industry which added 19,000 jobs over the month, compared to 21,000 in March. Manufacturing, however, continued to be sluggish, adding 1,000 jobs in April, down from 4,000 in March.

Service-providing employment rose by 197,000 jobs in April, up from the upwardly revised 181,000 in March. The ADP National Employment Report indicates that professional/ and business services, which includes accounting and tax preparation along with other services, contributed the most to growth in service-providing industries, adding 77,000 jobs, up from 67,000 in March. 

Expansion in the combined trade, transportation and utilities sector grew by 34,000, about equal to the 35,000 jobs added in March. The 8,000 new jobs in financial activities mark the strongest pace of growth in the industry since June 2013.

“It was a solid report,” said Mark Zandi, chief economist of Moody’s Analytics, which compiles the reports with ADP, in a conference call with reporters Wednesday. “With 220,000 jobs created in the month of April, I think that number is representative of underlying monthly job growth. Of course there are a lot of factors that sway the numbers month to month. The weather this winter was pretty poor and that depressed the numbers, but I think underlying job growth—extracting from all the vagaries of the weather data—is somewhere between 200,000 and 225,000 per month. The job gains are broad based. Nearly every industry sector is adding to payrolls. The exception is manufacturing, which is still quite soft. That is the only real industry sector that is not adding consistently to payrolls. With this pace of job growth, unemployment will continue to notch lower, and the labor market will continue to tighten up.”

He noted that in some industries and regions of the country, businesses are starting to see labor shortages, especially for highly skilled workers, and there has been a modest pickup in wage growth.

“The bottom line is I think that the job market is on firmer ground,” said Zandi. “It is picking up and I think we can look forward to growth that is north of 200,000 a month on a consistent basis over the next year or two, and that is quite encouraging not only for the workforce, but more broadly for the economy.”

The latest report on the gross domestic product indicated that the economy only grew 0.1 percent in the first quarter of 2014. Zandi said the weather, the expiration of unemployment benefits, inventory levels and weaker exports may have shaved some off some growth in the first quarter, but he added that the GDP number may be revised upward later.

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