In April, the ADP employment in the United States increased by 192,000, beating expectations, while wage growth slowed down

Dubbed as the "mini non-farm", ADP employment data for April exceeded expectations, with revisions to March data indicating a strong and steady US labor market. However, the market is closely watching the slowdown in wage growth.

On Wednesday, May 1st, the US ADP employment report showed that in April, ADP employment in the US increased by 192,000, higher than the expected 180,000, with the March figure revised from 184,000 to 208,000.

ADP's wage data shows that whether it's job switchers or employees staying in the same company, their wage growth is slowing down, although the former remains at a relatively high level. Specifically, the year-on-year wage growth for job switchers in April was 9.3%, narrowing from March, but still significantly higher than the low point a few months ago. Meanwhile, wages for employees staying in the same company increased by 5% compared to a year ago, marking the lowest growth rate since 2021.

The slowdown in wage growth at ADP is good news for the Federal Reserve, which is hoping for a cooling of wage inflation. Many other signs already indicate that US inflation is more sticky than expected by many economists and policymakers. For example, data released yesterday showed that labor costs in the US accelerated in the first quarter, marking the largest increase in a year. The labor cost index favored by the Federal Reserve unexpectedly heated up, indicating that the US job market remains strong.

Looking at employment growth by industry, the leisure and hospitality industry saw the strongest growth, adding 56,000 jobs, while the construction industry added 35,000 jobs. Other industries with significant growth include trade, transportation, and utilities, as well as education and healthcare services, both with an increase of 26,000 jobs; professional and business services added 22,000 jobs; and financial activities increased by 16,000 jobs. However, employment in the information industry decreased by 4,000 jobs.

In terms of employer size, companies with 500 or more employees saw the largest increase in hiring, reaching 98,000.

ADP's Chief Economist Nela Richardson stated:

"In April, hiring was broad-based across industries. Only the information industry - telecommunications, media, and information technology - showed weakness, leading to job losses, with wage growth at its lowest since August 2021." Financial blog Zerohedge commented that the US April ADP employment data remains strong. In this labor market situation, can the Federal Reserve maintain the fantasy of cutting interest rates at some point this year?

After the release of the ADP data, US stock futures continued to fall in pre-market trading, but the decline narrowed. The US dollar index showed a clear retreat, while gold generally showed a trend of oscillation and rise.

The ADP data is released two days earlier than the more closely watched US non-farm payroll report. In recent months, ADP numbers have consistently been lower than non-farm payroll numbers, with this trend continuing for eight consecutive months. Although in March, the numbers were quite close: the US Bureau of Labor Statistics reported an increase of 232,000 in private non-farm employment in March, while ADP data showed an increase of 208,000.

For the non-farm payroll report to be released this Friday, the market expects an increase of 204,000 in non-farm employment in April, lower than the 303,000 in March