WASHINGTON: Robust job creation continued among private companies in the United States in April but was below the expected pace, payrolls firm ADP reported Wednesday.
The report showed the brisk pace of hiring was likely to continue to drive down the US unemployment rate even further and make qualified labor more challenging for employers to find, ADP said.
ADP estimated companies added 204,000 employees last month, below the 225,000 analysts had been expecting.
The new numbers come ahead of Friday's more closely-watched government employment report. But observers caution the ADP results frequently diverge sharply from the Labor Department's non-farm payrolls data.
But the trend in both reports indicates the tight labor market, and economists say that and among other factors means the Federal Reserve is increasingly likely to raise interest rates this year more aggressively than previously expected
The Fed is not expected to raise the benchmark lending rate later Wednesday when it announces its decision on monetary policy at the conclusion of a two-day meeting, but is widely expected to hike a second time in June.
Ahu Yildirmaz, co-head of the ADP Research Institute, said skilled talent likely will become increasingly hard to find as jobs markets tighten.
- Unemployment rate falling -
"Job gains in the high-skilled professional and business services industry accounted for more than half of all jobs added this month," she said in a statement.
"The construction industry, which also relies on skilled labor, continued its six-month trend of steady job gains as well."
The report showed hiring slowed steadily since December, falling marginally in January, March and April, leaving last month at the lowest point since November.
Mark Zandi, chief economist at Moody's Analytics, which helped produce the report, said the trend would soon drive unemployment from the current 4.1 percent to below four percent.
That low level "is rarified and risky territory as the economy threatens to overheat," he said.
Companies already have reported having to raise wages to attract workers and that tends to push up inflation, which will weigh on the Fed's decision making.
Jim O'Sullivan of High Frequency Economics, said the numbers were slightly stronger than consensus expectations for official jobs data but added that "ADP is far from infallible in signaling" the government's payrolls figures.
The US economy added just 103,000 jobs in March, according to the government data, while ADP showed an increase of 228,000.
O'Sullivan said he expected the Labor Department numbers to sag in April as well: "We are allowing for a late start to spring in parts of the country, delaying some seasonal hiring."
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