MNI: US Labor Market Still ‘Fairly Solid' - ADP’s Richardson

The U.S. labor market remains robust despite a slowdown in private sector hiring even as uncertainty over trade policy surged this month, ADP chief economist Nela Richardson said Wednesday. 

“We have seen a lot of soft sentiment data, but that hard data has been fairly robust. Entering into this April employment number, it is a downshift but it is in line with a still fairly solid labor market,” Richardson told reporters in a briefing. 

Private sector hiring slowed to 62,000 new jobs in April from 147,000 in March and was the fourth weakest monthly increase since July 2020, but Richardson noted the three-month average was still 95,000.

Richardson said solid wage growth of 4.5% for job stayers, while slightly more moderate, is still above pre-pandemic levels, pointing to deeper employment strength. Wage growth for job changers actually climbed to 6.9% from 6.7%. 

The Bureau of Labor Statistics employment cost index, seen by the Fed as the gold standard measure of compensation growth, fell two-tenths to 3.6% in the first quarter from the previous three months, the Wednesday report showed. 

“We’re not seeing a dramatic cut in hours and we’re not seeing a dramatic cut in wages,” said Richardson, adding such trends would need to be seen before one can draw any longer term conclusions about employment weakness. (See MNI INTERVIEW: Fed On Hold For A While, Rate Direction Unclear)