Inside the ADP Report: Job growth:
Bottom Line: It's rare that disappointing news is solidly good news but that's the likely outcome of the April's private sector jobs report. First the disappointing:
177,000 private sector jobs added in April. That's nearly 100,000 jobs below the pace of the prior two months. That being said even that number wasn't all bad news. The 177,000 jobs is actually 68,000 better than in April 2016. So to the extent that seasonality is a factor - hiring was actually up 62% year over year. Taking a look at where those jobs were added:
- Small: +61,000
- Midsized: +78,000
- Large: +38,000
That's decent distribution for the jobs that were added in April. Ideally we'd see slightly better participation on the small business side but having small business job growth outperform large business job growth by nearly 40% is a decent leading indicator of the labor market/economy. So now for the good news.
After the March government jobs report came in extremely weak at just 98,000 - I suggested that we were likely to see meaningful upward revisions to that figure in future months. With that in mind the March ADP report revision for March still showed 255,000 private sector jobs being added in March. That strongly suggests that the government number was anomalous and we should see those revisions begin to show up with Friday's report.