U.S. private companies increased hiring in April, but there were signs that the labor market was slowing amid higher interest rates.
Private employment totaled 296,000 jobs last month, based on Wednesday's ADP report. Data for March was revised lower showing 142,000 jobs added instead of 145,000 as previously reported. Economists polled by Reuters had forecast private employment rising by 148,000.
The Federal Reserve is expected to raise its benchmark overnight interest rate by another 25 basis points to a range of 5.00%-5.25% at the end of a two-day policy meeting on Thursday before potentially halting the U.S. central bank's fastest monetary policy tightening campaign. since the 1980s.
Higher interest rates are slowing demand for workers and hiring may be eroded by a tightening in bank lending following the recent financial market turmoil. The impasse over raising the federal government's $31.4 trillion borrowing limit poses significant risks to the economy and the labor market.
Treasury Secretary Janet Yellen warned on Monday that the government could run out of money within a month.
The government reported on Tuesday that there were 9.6 million job openings at the end of March, the lowest since May 2021. Still, the labor market remained strong with 1.6 job openings for every unemployed worker in March, well above the 1.0-1.2 range economists had been saying is consistent with a job market that does not generate too much inflation.
The ADP report, produced in partnership with the Stanford Digital Economy Lab, is published ahead of the more comprehensive Labor Department Bureau of Labor Statistics employment report. On that basis it is not a reliable measure of predicting private payrolls in the BLS employment report.
With gains expected in government jobs, the total NFP reading is forecast to have increased by 179,000 jobs last month after gaining 236,000 in March.
