Private sector job creation was stronger than expected in April, providing further evidence of a stable labor market and less support for the Federal Reserve to cut interest rates amid persistent inflation, ADP reported on Wednesday.
The payrolls firm said companies added 109,000 jobs in the month, a step up from the 61,000 created in March and better than the Dow Jones consensus estimate of 84,000. April’s gains were the best in the ADP count since January 2025. March’s total was revised down by 1,000.
Earnings for those in employment increased 4.4% year over year, down 0.1%.
As it happened, job creation was concentrated in a few key sectors, indicating that while overall employment is strong, gains are not spreading across sectors.
Education and health services again dominated, adding 61,000 new hires. Trade, transport and services received a profit of 25,000. Construction, another consistent leader in recent months, rose 10,000, while financial services contributed 9,000.
The Trump administration’s tax administration efforts to restore jobs through tariffs also showed modest gains, with the sector adding 2,000. Leisure and travel and information services each saw growth of 4,000. Professional and business services reported 8,000 losses.
In terms of size, companies with fewer than 50 employees added 65,000 and those with 500 or more employees added 42,000.
“Small and large employers are hiring, but we are seeing a slowdown,” said Dr. Nela Richardson.
ADP chief economist. “Large companies have the resources to use them, while small ones are the most flexible, both important advantages in a complex workforce environment.”
While the headline number was better than expected, it is broadly consistent with what policymakers and Fed economists have described as a low-hire, low-cost environment — where companies are reluctant to lay off workers but have also paid more to hire.
Current conditions, with the labor market defying fears of a deep recession and inflation remaining high due to the impact from the cost and war in Iran, have kept the Fed in a position to hold interest rates.
The rate-setting Federal Open Market Committee last week voted again to keep its key interest rate unchanged. However, the vote saw four rare dissents, including three officials who thought the committee should remove language from its post-meeting statement that indicated the Fed’s next move would be a rate cut.
Markets will now turn their attention to Friday’s nonfarm payrolls report from the Bureau of Labor Statistics. Wall Street agreed to add 55,000 jobs and the unemployment rate remained steady at 4.3%.
The BLS report differs from the ADP in that it covers government activities. Also, the ADP data set is heavily skewed towards small and medium enterprises.
