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US businesses struggled to hire in April amid low unemployment

US private businesses saw surprisingly weak hiring in April, a survey showed Wednesday, amid low unemployment.

In the US wages are rising as companies compete for workers. — © AFP
In the US wages are rising as companies compete for workers. — © AFP

US private businesses saw surprisingly weak hiring in April, a survey showed Wednesday, amid low unemployment that’s made their quest to find workers even more difficult.

Payroll services firm ADP reported private employment rose 247,000 last month, considerably less than expected and down from March’s upwardly revised total.

The survey is considered a preview of the government jobs report due out Friday, and could foreshadow weak hiring overall last month in the US economy, where unemployment has nearly returned to the level it had before Covid-19 caused mass layoffs two years ago.

ADP’s chief economist Nela Richardson said the survey’s undershoot was not a sign that jobs weren’t available, but rather of a shortage of workers.

“While hiring demand remains strong, labor supply shortages caused job gains to soften for both goods producers and services providers,” she said.

“As the labor market tightens, small companies, with fewer than 50 employees, struggle with competition for wages amid increased costs.”

Small businesses lost 120,000 positions last month, particularly those with between one and 19 employees, which lost 96,000, the data said.

Large businesses however added 321,000 jobs, while medium businesses added 46,000.

Service providers made up the bulk of the job gains, with 202,000 positions added.

Leisure and hospitality, the sector comprising the bars and restaurants that suffered greatly from Covid-19, added the most positions in that sector with 77,000, while professional and business services firms added 50,000.

Goods producers added 46,000 positions, the data said.

Rubeela Farooqi of High Frequency Economics said despite the miss in the ADP survey, there’s reason to be optimistic about Friday’s jobs report.

“Recent data on the labor market including the downtrend in layoffs and ongoing job growth are signaling positive momentum, even as the supply side remains a constraint,” she said in an analysis.

AFP
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