Private sector employers added 296,000 jobs in April and annual pay grew 6.7% year-over-year, payroll provider ADP
The service-providing sector added a robust 229,000 jobs last month, although professional and business services, which include accounting and tax preparation, lost 16,000 jobs in April. The financial activities sector also subtracted 28,000 jobs, amid the fallout from a series of high-profile bank failures since March. However, the leisure and hospitality sector gained 154,000 jobs.
The goods-producing sector gained 67,000 jobs, including 52,000 in natural resources and mining, and 53,000 in construction, offset by a loss of 38,000 construction jobs.
Small businesses gained 121,000 jobs in April, including 14,000 in businesses with between one and 19 employees, and 107,000 in businesses with between 20 and 49 employees. Midsized businesses added 122,000 jobs, including 95,000 in companies with between 50 and 249 employees, and 27,000 in businesses with 250 and 499 employees. Large businesses with 500 employees or more gained 47,000 jobs last month.
Pay growth continued its nearly year-long slowdown. Job changers in particular saw a dramatic decline, with pay growth slowing from 14.2% to 13.2%, the slowest pace since November 2021.
People who stayed in their jobs saw an average annual pay increase of 6.7% year over year, while for those who changed jobs, annual pay increased by an average of 13.2%. For jobs stayers in the professional and business services sector, the average annual pay increase was 6.3%.
"The slowdown in pay growth gives the clearest signal of what's going on in the labor market right now," said ADP chief economist Nela Richardson in a statement. "Employers are hiring aggressively while holding pay gains in check as workers come off the sidelines. Our data also shows fewer people are switching jobs."
However, she indicated during a morning press conference that the slowdown in pay growth could be a good signal for the Federal Reserve in tamping down future interest rate hikes. The growth in jobs combined with slower pay growth could provide a "Goldilocks" type of report for the Fed. Nevertheless, the Federal Reserve did continue to raise interest rates Wednesday afternoon, voting to raise interest rates by a quarter of a percentage point to a range of between 5 and 5.25% — though they signaled that a pause may be coming.
Nevertheless, most employees are expecting raises to help them cope with rampant inflation.
Last month, the ADP Research Institute released a
Workers indicated that flexibility in hours is more important than flexibility in location.
The recent trend of "digital nomads" has the potential to become a permanent fixture of the workforce, with nearly half of workers (48%) saying they could relocate overseas and still stay working for their existing employer. Nearly eight out 10 (78%) workers believe they have the skills needed to advance their careers to the next level within the next three years, and 68% said their employer invests in the skills they need to advance their careers — all of which are critical factors in career progression (which was cited as important in a job by 40%, up from 23% last year).
"It looks like most of the global workforce does have some opportunities for flexibility, but stability has really risen as a key concern, especially in the U.S. and in North America more generally," Richardson told Accounting Today. "Globally, we've seen flexibility be outpaced in this year's survey by the desire for career progression and upskilling. It's very different than last year, where the global workforce in its entirety really cared about flexibility."
The survey results indicated some disjunction between flexibility of time, which most employers can accommodate to a certain degree, and flexibility of location, Richardson noted.
"The bulk of jobs have to be done on site," she said. "What workers want more is the flexibility of time. That could be alternative work arrangements, part-time schedules, or just the ability to come and go to family events and for needs like soccer practice or taking a parent to a doctor, for example. People want more flexibility on that scale, and I think that's really applicable to the accounting profession, especially during some parts of the year that are better known for long hours. How that can be adjusted in other parts of the year, providing more flexibility when schedules can accommodate, might help with that engagement during those peak times of work."
The survey found that 60% of the workforce preferred hybrid work, where they come into the office sometimes and work from home at other times. "Workers who are hybrid reported being happier and more satisfied in general," said Richardson. "It's not like people want to be completely remote. It's some balance between. It's more the flexibility of work rather than 'I just want to work from home 100%.'"
For some workers, the concept of being a "digital nomad" sounds appealing. "In terms of the digital nomad aspect, I would love to be a digital nomad to work from Barcelona," said Richardson. "That's my dream. And we see that in our results. Over half of the global workforce say that they work for a company that would allow them to work remotely or think they do."
She acknowledged that reality might not match up with workers' concepts of their jobs. "We didn't ask them if they've asked or been approved to work from another country," said Richardson. "We asked if they thought that they could work for a firm that would allow that to happen. I would suspect the numbers would fall a bit more, so I think that context is important. Workers think this is on the table, so in that sense, to the extent that workers are really driving some of the changes in human capital management, employer relations and employee engagement, the fact that workers believe this to be the case may eventually in the future give more avenues for people to work in overseas locations."
