WASHINGTON, May 6 (Reuters) – U.S. private payrolls posted their largest increase in 15 months in April, pointing to continued labor market stability even as the conflict in the Middle East clouds the economy’s outlook.
The labor market remains in a “low-hire, low-fire” state, though economists are warning of downside risks as the U.S.-Israel war with Iran fans inflation. The latest sign of labor market stability in the ADP’s national employment report on Wednesday bolsters financial market expectations that the Federal Reserve would leave interest rates unchanged into 2027.
“The labor market has been on solid but precarious footing for some time, not exactly growing but also not significantly deteriorating,” said Elizabeth Renter, senior economist at NerdWallet. “Amid ongoing global conflict, the fallout of a continuing oil shock and continued economic policy uncertainty, it would take more than one strong report on the labor market to signal we’re facing a different labor environment.”
Private employment rose by 109,000 jobs last month, the biggest increase since January 2025, after a downwardly revised 61,000 gain in March. Economists polled by Reuters had forecast private employment advancing by 99,000 jobs after a previously reported 62,000 increase in March.
The broad increase in payrolls was led by the education and health services, which added 61,000. Construction employment rose by 10,000. But professional business services shed 8,000 jobs. The ADP report is jointly developed with the Stanford Digital Economy Lab, and was published ahead of the Bureau of Labor Statistics’ more comprehensive and closely watched employment report for April on Friday. It, however, has been a poor predictor of the BLS’s private payrolls estimate.Â
“Actual private payrolls figures have generally been lower than what ADP predicts,” said Carl Weinberg, chief economist at High Frequency Economics.
Despite the war disrupting shipping in the Strait of Hormuz and raising commodity prices, there has been no marked pickup in layoffs. Government data on Tuesday showed there were 0.95 job openings for every unemployed person in March versus 0.91 in February.
Nonfarm payrolls likely increased by 62,000 jobs in April after rebounding 178,000 in March, a Reuters survey of economists predicted. Private payrolls are forecast to have increased by 75,000 after surging 186,000 in the prior month. The unemployment rate is expected to have held steady at 4.3%.
   A Conference Board survey last week showed the share of consumers perceiving employment as “hard to get” dropped in April while the proportion saying jobs were “plentiful” was little changed. The U.S. central bank last week left its benchmark overnight interest rate in the 3.50%-3.75% range, citing rising inflation concerns.
(Reporting by Lucia Mutikani; Editing by Chizu Nomiyama)
