Companies in U.S. add fewer workers than forecast in April

WASHINGTON – Payrolls at companies in the U.S. rose in April at the slowest pace in more than a year, a sign labor market gains may be moderating along with the economy.

The 169,000 advance in employment was the smallest since January 2014 and followed a 175,000 gain in March that was smaller than initially estimated, according to figures today from the Roseland, N.J.-based ADP Research Institute. The median forecast of 43 economists surveyed by Bloomberg called for an April increase of 200,000.

Employers, coming off the biggest year for hiring since 1999, are limiting additions to headcounts as they assess demand following a first-quarter economic slowdown. Smaller payroll gains may extend the time needed to take up slack in the labor market, a precondition for faster growth in wages that have been slow to accelerate.

“The job market continues to improve, but the pace is likely to moderate, simply because the fourth quarter pace was so outstanding,” Scott Brown, chief economist at Raymond James Financial Inc. in St. Petersburg, Fla., said before the report. At the same time, “we do anticipate some drag from the contraction in energy.”

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Estimates in the Bloomberg survey ranged from payroll gains of 170,000 to 270,000. March’s figure was revised down from a previously reported 189,000.

Goods-producing industries, which include manufacturers and construction companies, decreased headcount by 1,000 in April, according to today’s report. Construction employment rose by 23,000 and factory payrolls decreased by 10,000. Headcount at service providers rose by 170,000.

Company size

Companies employing 500 or more workers added 5,000 jobs. Employment at businesses with 50 to 499 employees increased by 70,000 and the smallest companies boosted payrolls by 94,000, the report showed.

“Fallout from the collapse of oil prices and the surging value of the dollar are weighing on job creation,” Mark Zandi, chief economist at Moody’s Analytics Inc., said in a statement. Moody’s produces the figures with ADP.

The ADP report is based on data from businesses with almost 24 million workers on their combined payrolls.

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