Private employers added fewer jobs than expected in April as a sense of “unease” led to a slowdown in hiring and investors watch for signs that tariffs are weighing on economic growth.
On Wednesday, data from ADP showed private payrolls grew by just 62,000 in April, far fewer than the 115,000 expected by economists and below the 147,000 new jobs added in March. This marked the smallest increase in private payrolls since July 2024.
“Unease is the word of the day,” ADP chief economist Nela Richardson said in the release. “Employers are trying to reconcile policy and consumer uncertainty with a run of mostly positive economic data. It can be difficult to make hiring decisions in such an environment.”
The report comes just two days before the government’s monthly jobs report is released on Friday.
The April jobs report is expected to show 133,000 nonfarm payroll jobs were added to the US economy this month while unemployment held steady at 4.2%, according to data from Bloomberg. In March, the US economy added 228,000 jobs while the unemployment rate rose to 4.2%.
Wednesday’s ADP release comes one day after a weaker-than-expected reading on job openings for March.
Data from the Bureau of Labor Statistics showed 7.19 million jobs were open at the end of March, a decrease from the 7.48 million seen in February. Job openings in March hit their lowest level since September 2024 and were near levels not seen since December 2020.
The Job Openings and Labor Turnover Survey (JOLTS) also showed 5.4 million hires were made during the month, up slightly from the 5.37 million made during February. The hiring rate held steady at 3.4%. The quits rate, a sign of confidence among workers, moved up slightly in February to 2.1% from 2%.
Both the hiring and quits rates are hovering near decade lows.
Meanwhile, the ratio of job openings to unemployed workers fell to 1.02% in March, the lowest since the post-pandemic labor market recovery began. This means there is now roughly one unemployed worker for each open job in the economy. During the post-pandemic recovery in 2022, this ratio was closer to 2:1.
Sarah House, senior economist at Wells Fargo, said the decline in this ratio “is reflective of a steady weakening in labor demand.”
House added that the labor market is currently in a “fragile stasis that makes it vulnerable to being knocked off balance should the deteriorating outlook for growth come to fruition.”
Another wide-ranging update on the state of the labor market is slated for release on Friday morning.
Josh Schafer is a reporter for Yahoo Finance. Follow him on X @_joshschafer.
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