In another sign of a slowdown by the U.S. labor market, payroll processor Automatic Data Processing, Inc. (ADP) released a report on Wednesday showing that private sector employment increased by much less than expected in the month of April.
ADP said private sector employment increased by 119,000 jobs in April following a downwardly revised increase of 131,000 jobs in March.
Economists had expected employment to increase by about 155,000 jobs compared to the addition of 158,000 jobs originally reported for the previous month.
The private sector job growth in April reflects the slowest pace of growth since the addition of 104,000 jobs in September of 2012.
Jennifer Lee, senior economist at BMO Capital, said, "The U.S. ADP national employment report missed expectations in April, and then some, which is, in turn, lowering expectations for the official jobs report due out Friday."
However, Lee noted that the ADP number is not a perfect indicator of the official payroll figure, which includes both public and private sector jobs.
The continued job growth in April was largely due to the addition of 113,000 service-providing jobs, although ADP noted that reflects the weakest pace of growth in seven months.
Goods-producing employment also saw its slowest pace of growth in seven months, edging up by just 6,000 jobs in April.
While employment in the construction sector picked up by 15,000 jobs, the increase was largely offset by the loss of 10,000 manufacturing jobs.
Mark Zandi, chief economist of Moody's Analytics, said, "Job growth appears to be slowing in response to very significant fiscal headwinds."
"Tax increases and government spending cuts are beginning to hit the job market," he added. "Job growth has slowed across all industries and most significantly among companies that employ between 20 and 499 workers."
The ADP report said small businesses added 50,000 jobs in April, while employment at large businesses rose by 43,000 jobs. Medium-sized businesses added 26,000 jobs.
Friday morning, the Labor Department is scheduled to release its closely watched monthly employment report. Economists currently expect employment to increase by about 153,000 jobs in April compared to the addition of 88,000 jobs in March.
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April 24, 2026 15:15 ET Economics news flow was relatively light this week even as the conflict in the Middle East continued, raising concerns for policymakers. In the U.S., spending data, initial jobless claims and pending home sales were the highlights. Business confidence in the biggest euro area economy was in focus in Europe. Inflation data from Japan gained attention in Asia.