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ADP private sector payroll estimate: Strong gains in middle market hiring

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The ADP April estimate of private sector hiring released on Wednesday pointed to strong hiring by middle market businesses amid robust service sector and goods producing sector hiring.

The middle market accounted for 52.7 percent, or 145,000 out of 275,000, of the total change in private sector employment. Small firms added 77,000 jobs, or 28 percent of overall hiring, while large firms added 19.3 percent, or 53,000 jobs to the monthly gain. This is likely a function of firms catching up with hiring after a three-month slower pace of job gains relative to the final six months of 2018. Regardless, in our estimation, labor market dynamics point to another solid gain in April hiring in Friday’s monthly nonfarm payroll report and firms continue to face problems finding qualified workers.

adp graph

The ADP report has a long history of large misses, especially to the upside, relative to the Bureau of Labor Statistics monthly estimate. Thus we are not changing our monthly employment forecast for April of a 207,000 gain in total employment with the unemployment rate remaining unchanged at 3.8 percent.

Nevertheless job gains by sector inside the report were impressive. The goods-producing sector increased by 52,000 and the services-providing sector jumped by 223,000 jobs.

 

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About Joseph Brusuelas

@JoeBrusuelas

Joe Brusuelas, “chief economist to the middle market,” is the preeminent voice championing issues and policies facing midsize companies in the United States and around the world. An award-winning economist, Brusuelas has more than 20 years’ experience analyzing U.S. monetary policy, labor markets, fiscal policy, international finance, economic indicators and the condition of the U.S. consumer.

A member of the Wall Street Journal’s forecasting panel and the UCLA Anderson School of Management's Board of Directors, Brusuelas regularly briefs members of Congress and other senior officials regarding the impacts of federal policy on the middle market and the factors by which middle market executives make business decisions. He also frequently offers his insights on the U.S., Canadian and global economies in the financial media. In 2020, he was named one of the 100 most influential economists by Richtopia. In December 2023, Brusuelas and the economics team were recognized on Bloomberg's list of Best Bond Forecasters after correctly predicting where the benchmark Treasury would end the year.

Before joining RSM in 2014, Brusuelas spent four years as a senior economist at Bloomberg L.P. and the Bloomberg Briefs newsletter group, where he co-founded the award-winning Bloomberg Economic Brief. Earlier in his career, he was a director at Moody's Analytics covering the U.S. and global economies for the Dismal Scientist website. He also served as chief economist at Merk Investments L.L.C. and chief U.S. economist at IDEAglobal.

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