ADP Employment: Modest Gains

Bottom Line:   ADP reported slower job gains than expected in April of 247k, well below the consensus expectation of 383k. That said, there there were positive revisions to prior data, with February revised up from +486 to +601 and March revised up from +455 to +479. In April, the Leisure and Hospitality sector was surprisingly weak, adding less than half the jobs averaged over the last six months. Job gains in goods-producing sectors were slower too, with the manufacturing sector in April adding less than half the jobs in March. Overall, the trend rate of job growth is slowing slightly but remains historically robust. This report suggests a downside risk to the consensus estimate for the nonfarm payroll report due Friday of 385k.ADP National Employment ROSE by 247k in April, compared with the consensus estimate for a gain of 383k.
 
Meanwhile, the revisions to the prior 3 months added an additional 95k to the previous estimate. Over the past 12 months, private payrolls have increased by an average of 518k per month, lifting employment to 5.0% ABOVE its year-ago level.Jobs in Goods-Producing Industries ROSE by 46k jobs as Manufacturing gained 25k workers. Moreover, Construction gained 16k jobs.Service-Producing Industries ROSE by 202k jobs with Professional/Business Services hiring 50k workers, Trade/Transport/Utilities adding 15k, and Financial Activities increasing by 8k workers.Small Firms fired 120k workers, Medium-Sized Firms grew by 46k employees while Large Firms added 321k positions.