The numbers: Businesses created 742,000 new jobs in April — the most in seven months — in another sign of surging U.S. growth as coronavirus cases shrink and gobs of federal stimulus course through the economy.
The increase in private-sector jobs reported by giant payroll processor ADP was the largest since September.
Many companies are trying to hire in anticipation of even faster growth in the months ahead, with many saying it’s a challenge to find enough workers. The U.S. grew 6.4% in the first quarter and by all signs the economy is getting even stronger.
The increase in hiring fell a bit short of Wall Street’s forecast. Economists polled by Dow Jones and The Wall Street Journal had estimated ADP would report 800,000 new private-sector jobs.
Read: Hiring is speeding up and jobs are coming back as the economy gains steam
What happened: Hiring was up across the board. Large companies added 277,000 new employees. Mid-sized businesses filled 230,000 jobs. And small businesses hired 235,000 people.
Most of the hiring was concentrated in businesses that suffered the most during the pandemic: restaurants, retailers, education and health care.
“Service providers have the most to gain as the economy reopens, recovers and resumes normal activities and are leading job growth in April,” said Nela Richardson, chief economist of ADP.
Manufacturers and construction companies combined also created nearly 100,000 jobs.
Read: ‘Crazy’ prices and rampant shortages frustrate manufacturers and threaten to slow economic recovery, ISM data show
Hiring could speed up even further if coronavirus cases continue to sink and all states lift restrictions by the end of the summer. Twenty-three states, mostly in the Northeast, upper Midwest and far West, still have some rules in place.
The ADP survey is a poor bellwether historically for the government’s official employment report, but they are both moving in the same direction this year.
Economists forecast an overall increase of 1 million new jobs in April. The Labor Department’s tally also includes government workers.
ADP revised its estimate of new private-sector jobs in March to 565,000 from 517,000.
Big picture: The economy is on fire thanks to gigantic government stimulus and waning coronavirus epidemic as more Americans get vaccinated. About 55% of all adults have received at least one jab.
The U.S. might have to pay a big price when the stimulus bill eventually comes due, but in the short run, the economy looks primed for a prolonged stretch of rapid growth as more Americans return to work.
What they are saying: “The labor market is recovering and job growth is set to
accelerate over coming months, as the economy continues to move
closer to a broader reopening,” said Rubeela Farooqi, chief U.S. economist of High Frequency Economics.
Market reaction: The Dow Jones Industrial Average
and S&P 500
were slightly higher in early trade on Thursday.