US companies added 247,000 jobs in April, sharply missing expectations: ADP

Economists surveyed by Refinitiv expected private payrolls to grow by 395,000

U.S. companies added far fewer jobs than expected in April, suggesting the tightest labor market in decades has made it difficult for businesses to fill a record number of open positions, according to the ADP National Employment Report released Wednesday morning. 

Companies added 247,000 jobs in April, sharply missing the 395,000 gain that economists surveyed by Refinitiv had predicted. It also marked a big decline from March, when private employers added an upwardly revised 479,000 jobs.


"In April, the labor market recovery showed signs of slowing as the economy approaches full employment," said Nela Richardson, ADP's chief economist. "While hiring demand remains strong, labor supply shortages caused job gains to soften for both goods producers and services providers."

Job numbers

A large "Now Hiring" advertisement posted on the windows of the Advance Auto Parts store in Bay Shore, New York, on March 24, 2022. (Steve Pfost/Newsday RM via Getty Images / Getty Images)

The slowdown in hiring largely stemmed from small businesses, as companies with fewer than 50 workers actually saw payrolls plunge by 120,000 last month. The decline was even more pronounced in businesses with fewer than 19 workers, with those employers accounting for the bulk of the losses last month, shedding 96,000 jobs. 

That's in part because the hottest inflation in 40 years, coupled with a persisting labor shortage and the high cost of attracting new employees, has made it difficult for small business owners to maintain their bottom line and retain workers.

"As the labor market tightens, small companies, with fewer than 50 employees, struggle with competition for wages amid increased costs," Richardson said. 

Large businesses that employ 500 or more workers helped to offset the decline, hiring 321,000 new workers last month. The bulk of the payroll increase stemmed from businesses with more than 1,000 employees, which saw a gain of 289,000 workers in April. Medium businesses, meanwhile, saw positions jump by 46,000.


Papa John's Pizza and Anglez Hair Design have multiple signs around the businesses looking for employees. (Craig Bailey/Florida Today via USA Today network / Reuters Photos)

Service-providing industries added 202,000 new jobs last month, with the largest increases in leisure and hospitality (77,000), education and health services (48,000), professional and business services (50,000), and trade, transportation and utilities (15,000). 

Goods-producing industries, meanwhile, saw payrolls grow by 46,000, with the bulk of the gains in manufacturing (25,000) and construction (16,000).


A separate Labor Department report released on Tuesday revealed there were about 11.5 million open jobs by the end of March – a fresh high. At the same time, a record 4.5 million workers quit their jobs as they continue to search for better wages and working conditions.

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 394,000 and the unemployment rate inched down slightly to 3.5%, the lowest level since the pandemic began in February 2020.