Private companies in the United States slowed down a sudden hiring spree in April, in an effort to prepare for the possible impact of tariffs announced by President Donald Trump on key US trading partners, according to an ADP report on Wednesday.
Private sector payrolls increased by just 62,000 jobs for the month, the smallest increase since July 2024 amid uncertainty over the extent to which the rate will impact worker recruitment plans and the overall state of the economy.
That was a significant decline from the revised increase to 147,000 in March, and well short of the Dow Jones consensus estimate of an increase of 120,000.
“The key word today is ‘uncertainty.’ Employers are trying to balance underlying uncertainty and user sentiment with mostly positive economic data,” said ADP Chief Economics Officer Nela Richardson. “It is quite difficult to make employee decisions in an atmosphere like this.”
Wage growth also shows contraction. The annual salary increase for workers who remain in office was only 4.5%, a decrease of 0.1 percentage point compared to the previous month. However, for those who changed jobs, the salary increase increased to 6.9%, up 0.2 percentage points.
In terms of sectors, the recreation and hospitality industry recorded the highest increase with an additional 27,000 jobs. Other sectors showing growth included trade, transportation and utilities (21,000), financial activities (20,000), and construction (16,000). In contrast, the education and health services sector lost 23,000 jobs, while the information services sector shrank by 8,000 jobs.
The ADP budget is usually used as an initial guide to the nonfarm payrolls report from the Bureau of Labor Statistics which will be announced on Friday. However, these two reports often show significant differences. Economic experts interviewed by Dow Jones predicted job growth of 133,000 in the official BLS report, which includes employment in the government sector. The unemployment rate is also expected to remain at 4.2%.
