Private payrolls rose by 742,000 in April, missing expectations: ADP
Private payrolls rose less than expected in April, but still increased by the most since September as COVID-19 vaccinations and reopenings stoke economic activity.
U.S. employers added back 742,000 payrolls last month, ADP said in its closely watched monthly report on Tuesday. This followed a revised rise of 565,000 jobs in March. Consensus economists were looking for private payrolls to increase by 850,000, according to Bloomberg data.
Economists have become increasingly upbeat on the U.S. labor market and overall economy over the past month, with vaccinations taking place expediently in the U.S. and more social distancing restrictions getting rolled back. Many consumers are flush with savings and some stimulus money left to spend from during the pandemic, leading to an accumulation of pent-up demand. New jobless claims improved to a new pandemic-era low last week and are expected to fall even further this week. And the number of individuals claiming benefits across all unemployment programs has come down sharply from its pandemic-era high.
ADP's private payrolls report comes, as usual, two days before the U.S. Labor Department's "official" April jobs report on Friday. The ADP report has typically been an unreliable indicator of the results in the government report due to differences in survey methodology, with ADP only counting individuals on active payrolls during the survey period as employed, whereas the Labor Department includes those receiving paychecks during the survey period. Last month, the Labor Department reported that 780,000 private payrolls came back in March, whereas ADP reported just over half a million at the time.
Consensus economists are looking for the Labor Department's report this Friday to show the U.S. economy added back 995,000 non-farm payrolls in April, with 950,000 of these comprising private payrolls. The unemployment rate is expected to fall to 5.8% from 6.0%, reaching the lowest level since the start of the pandemic.
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Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck
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