• U.S. private-sector employment rose by 109,000 in April, missing expectations.
  • Hiring was concentrated in services, with goods-producing sectors shedding jobs.
  • The data may signal a cooling labor market ahead of the government's payroll report.

ADP Report Misses Estimates

The U.S. private sector added 109,000 jobs in April, according to the ADP National Employment Report released Wednesday, falling short of the consensus estimate of 150,000. The figure marks a slowdown from March's revised gain of 184,000, raising questions about the resilience of the labor market.

"Hiring was broad-based but soft," said Nela Richardson, chief economist at ADP, in a statement. "The slowdown was most pronounced in goods-producing industries, which lost jobs."

Sector Breakdown

The services sector drove gains, adding 115,000 jobs, led by education and health services (49,000) and professional and business services (22,000). Trade, transportation, and utilities added 16,000, while financial activities added 13,000. In contrast, goods producers shed 12,000 jobs, with manufacturing down 16,000 and natural resources and mining down 3,000. Construction added 7,000.

Job gains were concentrated among large firms with more than 500 employees, which added 80,000 positions. Medium-sized firms added 34,000, while small businesses added 4,000.

Implications for Fed Policy

The ADP report, which often diverges from the Labor Department's payrolls data, comes as the Federal Reserve weighs its next move on interest rates. A softening labor market could ease inflation pressures, potentially paving the way for rate cuts later this year. However, wage growth remained elevated at 5.0% year-over-year for job-stayers, according to ADP.

Markets reacted modestly to the data, with S&P 500 futures paring earlier gains. The yield on the 10-year Treasury note fell 3 basis points to 4.62%.

Looking Ahead

Economists will closely watch the Bureau of Labor Statistics' payroll report on Friday for further clarity. Consensus expects a gain of 240,000 nonfarm jobs, though the ADP data introduces downside risk. The two reports have diverged significantly in recent months, with the official payrolls averaging 276,000 over the past three months versus ADP's 188,000.

A spokesperson for ADP declined to comment on the methodology or revisions beyond the report's release.

Correction: An earlier version of this article misstated the March revision. It has been updated to reflect the accurate figure.