US companies added 742,000 jobs in April, ADP says

Release precedes more closely watched April jobs report

U.S. private-sector job growth climbed in April as the labor market's recovery from the coronavirus pandemic gains steam, according to the ADP National Employment Report released Wednesday morning. 

Companies added 742,000 jobs last month, an increase from March's upwardly revised 565,000 but slightly missing the 800,000-job increase that economists surveyed by Refinitiv had predicted. 

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"The labor market continues an upward trend of acceleration and growth, posting the strongest reading since September 2020," Nela Richardson, chief economist of ADP, said in a statement.

Although there are still 8 million fewer jobs than there were before the crisis began, payroll gains have totaled 1.3 million over the last two months – compared to only 1 million over the course of the previous five months. 

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Leisure and hospitality, the sector hit hardest by the pandemic, accounted for the bulk of the gains, adding 237,000 new positions last month. While employment in the sector is still well below the level it was about one year ago, it's been steadily hiring workers as vaccination rates have increased, business restrictions have eased and more Americans venture out to shop, eat at restaurants and travel.

Trade, transportation and utilities also made up a significant number of job gains, adding 155,000 new positions last month. It was followed by professional and business services, which added 104,000, and education and health services, which contributed 92,000.

In all, the service-producing sector contributed 636,000 jobs in April. But the goods-producing sector also played a role in job creation, adding some 106,000 jobs. Manufacturing contributed 55,000, while construction added 41,000. Natural resources and mining increased its payroll by 10,000.

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Large businesses that employ more than 500 workers saw the biggest gain last month, with payroll rising by 277,000. Medium-sized businesses that employ between 50 to 499 employees created 230,000 jobs, while small businesses added 235,000 positions. 

The ADP release comes two days ahead of the more closely watched Labor Department jobs report, which is expected to show that payrolls rose by 978,000 and the unemployment rate inched down slightly to 5.8%.