US private sector created 177K jobs in April, vs 175K jobs expected: ADP

Key Points
  • Private sector job creation cooled in April but was still in line with what economists had been expecting.
  • Companies created 177,000 new positions, compared with 175,000 jobs expected.
  • The numbers come at a delicate time for the economy, markets, and the political landscape.
ADP April payrolls up 177K
ADP April payrolls up 177K

Job creation in the private sector cooled in April but was still in line with what Wall Street had been expecting.

Companies created 177,000 new positions for the month, according to a report from ADP and Moody's Analytics that showed a sharp deceleration from the previous month. The March report indicated a growth of 255,000, a number revised lower from the originally reported 263,000.

Economists surveyed by Reuters had expected the April count to be 175,000.

That big March number had triggered hopes that the strong start to the year for employment was continuing. But just two days after the April 5 ADP release, the government's official nonfarm payrolls account showed the economy created just 98,000 new positions for the month.

Mark Zandi, chief economist at Moody's Analytics, said the disparity was due largely to weather. The same week the government used for calculating its March total came the same week of a major snowstorm that halted activity in the East, he said.

"Fundamental job growth is still strong," Zandi told CNBC. "You shouldn't read too much" into monthly fluctuations in the numbers, he added.

The numbers come at a delicate time for the economy, markets, and the political landscape. Rising sentiment has been met with mixed signals from hard economic data, though stocks have continued to rise despite the uncertainty.

The ADP/Moody's tally, which does not include government employees, showed that job creation in April came primarily from the services sector after three strong months for goods-producing industries.

Services accounted for 165,000 of the total, led by professional and business services with 72,000. Education and health services contributed 53,000. The leisure and hospitality industries — primarily bars and restaurants — added 35,000.

Of the 12,000 goods-producing jobs, 11,000 came from manufacturing while mining grew by 3,000. Construction lost 2,000.

"In April we saw a moderate slowdown from the strong pace of hiring in the first quarter," Ahu Yildirmaz, vice president and co-head of the ADP Research Institute, said in a statement. "Despite a dip in job creation, the growth is more than strong enough to accommodate the growing population as the labor market nears full employment."

Businesses with 50 to 499 employees led job creation with 78,000 positions, while companies with fewer than 50 workers added 61,000 and large businesses contributed 38,000.

The numbers came ahead of Friday's nonfarm payrolls report, which is expected to show growth of 185,000 and the unemployment rate possibly ticking up a notch to 4.6 percent.

Economists occasionally will revise their expectations for the official count on ADP numbers, though wide disparities between the two reports are not unusual.