In April, companies in the United States displayed a notable reduction in hiring, with private sector payrolls increasing by only 62,000 positions. This represented the smallest growth since July 2024, according to data released by ADP.

This pause in hiring comes as businesses navigate uncertainties linked to tariffs imposed by President Donald Trump. The latest figures fall short of economists’ expectations, who had predicted an increase of 120,000 jobs for the month following a downwardly revised gain of 147,000 in March.

Economic Uncertainty Affects Hiring Practices

Nela Richardson, ADP’s Chief Economist, summarized the current sentiment in the labor market by stating, “Unease is the word of the day. Employers are trying to reconcile policy and consumer uncertainty with a run of mostly positive economic data.” This climate of doubt can complicate hiring decisions for employers.

Wage Growth Trends

The report also highlighted trends in wage growth. Employees who remained in the same positions saw a 4.5% rise in earnings year-over-year, which is a slight decline from previous months. Conversely, wage increases for those changing jobs rose to 6.9%, reflecting a minor uptick.

Sector Analysis

Examining job creation across various sectors reveals that the leisure and hospitality industry added the most positions, contributing 27,000 new jobs. Other sectors with employment growth include:

• Trade, Transportation, and Utilities: 21,000
• Financial Activities: 20,000
• Construction: 16,000

However, not all sectors experienced growth. Education and Health Services saw a reduction of 23,000 jobs, while Information Services lost 8,000.

Upcoming Economic Indicators

ADP’s report acts as a precursor to broader employment data expected from the Bureau of Labor Statistics (BLS) later this week. Economists anticipate a job growth figure of 133,000 in the upcoming BLS report, which includes government employment figures. The unemployment rate is projected to hold steady at 4.2%.