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In April, companies dramatically reduced their hiring activities as they prepared for the ramifications of President Donald Trump’s tariffs on U.S. trading partners, according to a report from ADP released on Wednesday.
The month saw a modest increase in private sector payrolls, with only 62,000 jobs added, the lowest rise since July 2024. This slowdown comes amid growing uncertainty regarding the extent of the tariffs and their potential effects on employment and the wider economy.
This figure is a significant drop from the downwardly adjusted increase of 147,000 jobs in March and falls short of the Dow Jones projection of 120,000 new jobs.
“Unease is the word of the day. Employers are trying to reconcile policy and consumer uncertainty with a run of mostly positive economic data,” stated Nela Richardson, chief economist at ADP. “It can be difficult to make hiring decisions in such an environment.”
Wage growth also showed signs of a slowdown, increasing by 4.5% year-over-year for employees who retained their jobs, a decrease of 0.1 percentage points from the previous month. In contrast, workers who changed jobs experienced a rise in wages to 6.9%, up by 0.2 percentage points.
Breaking down the sectors, leisure and hospitality reported the largest job increase, adding 27,000 positions. Trade, transportation, and utilities sectors followed with 21,000 new jobs, while financial activities and construction saw gains of 20,000 and 16,000 respectively. Conversely, education and health services experienced a decline of 23,000 jobs, and the information services sector lost 8,000 positions.
The ADP report acts as a precursor to the nonfarm payrolls data set to be released by the Bureau of Labor Statistics on Friday. Historically, the two reports can showcase considerable variances. Economists surveyed by Dow Jones anticipate a job growth figure of 133,000 in the BLS report, which encompasses government employment as well. Additionally, the unemployment rate is projected to remain steady at 4.2%.
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