The private sector added 275,000 jobs in April vs. just 180,000 expected following the low figure of 129,000 the month before. While a slight uptick was expected, the steep surge in job growth points to unexpected health in the services industry.
Key Takeaways
- Private sector employment rose to 275,000 according to the latest ADP employment report.
- Goods-producing jobs gained 52,000 and the service industry rose by 223,000.
The service industry accounts for the bulk of the activity, led by gains of 59,000 in professional and business services, 54,000 in education and health services, and 52,000 in leisure and hospitality. All other sub-categories rose except information, which dropped by 1,000.
As is typically the case, the majority of jobs were created by medium-sized businesses of 50-499 employees, with 145,000 new jobs added to those companies. Small businesses with less than 50 employees added 77,000 jobs. Large businesses of 500+ employees added 53,000 jobs, with 30,000 of those jobs ceated by companies with over 1000 employees. Looking at the details, jobs in goods-producing sector rose 52k. Jobs in service-providing sector rose 223k.
ADP Payroll Estimate: Mid-sized firms accounted for 52.7 percent, or 145,000 out of the 275,000 total change in private sector employment. Small firms added 77,000 or 28 percent of overall hiring, while large firms added 19.3 percent or 53,000 jobs to the monthly gain. pic.twitter.com/mQA3vNuHQ4
— Joseph Brusuelas (@joebrusuelas) May 1, 2019
Expert Outlook
“April posted an uptick in growth after the first quarter appeared to signal a moderation following a strong 2018,” said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute. “The bulk of the overall growth is with service providers, adding the strongest gain in more than two years.”
Mark Zandi, chief economist of Moody’s Analytics, said, “The job market is holding firm, as businesses work hard to fill open positions. The economic soft patch at the start of the year has not materially impacted hiring. April’s job gains overstate the economy’s strength, but they make the case that expansion continues on.”
Market Reaction
Strong job gains in the private sector typically cause the US dollar to surge, placing selling pressure on the price of gold. Gold has ticked downward following the unexpectedly strong report, last trading at $1,280.78/oz and down -0.16% with a high of $1,284.32/oz and a low of $1,277.93/oz.
Spot gold prices were already showing signs of weakness before the report, and have lost further momentum since then. June gold futures are down -0.19% and trading at $1,283.30/oz.
Gold Price Chart
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