Strong April ADP jobs report hides employment shift toward sectors such as health care, education

Despite headwinds from higher energy prices that were expected to trickle down to the rest of the economy, the U.S. private sector employment picture improved greatly in April, according to the latest ADP National Employment Report.

The monthly report, produced by ADP Research in collaboration with the Stanford Digital Economy Lab, showed that private-sector employment increased by 109,000 jobs last month, with small-business employees leading the way.

Small businesses with between 1 and 19 employees added 43,000 jobs last month, while slightly larger small businesses with between 20 and 49 employees added 22,000 jobs. Midsized companies had a mixed hiring quarter. Those with 50-249 employees added 5,000 jobs, while those with 250-499 employees lost 3,000. Large corporations with 500+ employees added 42,000 jobs, the ADP report revealed.

"Small and large employers are hiring, but we're seeing softness in the middle. Large companies have resources to deploy, and small ones are the most nimble, both important advantages in a complex labor environment," said ADP Chief Economist Nela Richardson in a press release.

Education and health services continue to lead the way, adding 61,000 jobs in the month, with trade, transportation, and utilities jobs coming in a distant second with 25,000 jobs added.

Professional and business services were the only sector besides "other services" to experience a decline in employment last month, shedding 8,000 jobs.

As of the end of April, there are 132,506,000 privately employed people working in the U.S., according to the ADP report.

U.S. job market remains strong, but becoming more "selective," analyst says

April's jobs numbers are a good sign for an economy that has to show resilience amid a war in the Middle East that can turn hot or cold on President Donald Trump's whim.

Gas prices are about 50% higher than before the Iran War started, according to PBS. And despite oil prices falling as U.S. warships escort cargo ships through the Strait of Hormuz, U.S. gas prices are expected to remain elevated for some time, NBC News reported.

High energy prices tend to have a cascading effect through the economy, and while the April jobs numbers didn't reflect that stress through lower employment, researchers at global staffing and advisory firm The Planet Group (TPG) did notice some other warning signs.

"The market isn't slowing as much as it's becoming more selective. We're seeing fewer roles open, but stronger retention and more targeted hiring. The bottom line is, companies are prioritizing impact over volume," Christine Belmonte, president of technology staffing for TPG, told TheStreet.

"Job flow and interviews are down year-over-year, but consultants are staying on longer. That tells you employers are holding onto talent they trust while being more deliberate about adding new roles."

Jeff Bonci, president of accounting and finance for TPG, in comments emailed to The Street, identified three themes that stood out from the April report.

• Employers are still hiring, but they're being more selective, tightening budgets and adding more approval layers
• Decision-making has slowed in some cases
• HR is still a large part of the job market, with about 20% of jobs being in human resources.
• Most of the hiring activity is coming from manufacturing, utilities, professional services and higher education.

"In energy, utilities, and engineering, demand continues to hold up relatively well. Hiring is largely tied to infrastructure investment, capital projects, and critical operations, which is creating that stability even as broader white-collar hiring remains flat," Jim Pagliero, TPG's president of energy, engineering, and manufacturing, told TheStreet.

"At the same time, the market is very targeted where companies are prioritizing specialized engineering and technical roles, while more discretionary and back-office hiring remains soft."

Photo by Oscar Wong on Getty Images

ADP jobs report is good sign ahead of government jobs numbers

The ADP jobs report and the U.S. Bureau of Labor Statistics report differ in a few ways (most notably in that the BLS report includes government employment), but together they offer a holistic view of the U.S. employment situation.

The April BLS report is scheduled for release on Friday, May 8, and Wall Street analysts are expecting 55,000 jobs added, with the unemployment rate holding at 4.3%.

The March BLS report was a pleasant surprise amid the war, as nonfarm payroll employment increased by 178,000 jobs in March, and the unemployment rate and the number of unemployed people (4.3% and 7.2 million, respectively) didn't change much from the previous month.

Just as the ADP data show, health care was the strongest sector, adding 76,000 jobs, mostly concentrated in ambulatory health care services. Construction was the second-best-performing sector, adding 26,000 jobs.

Meanwhile, government employment continued to drop, and employment in financial activities dropped by 15,000. Employment in financial activities is down by 77,000 since its peak in May 2025.

"Demand is still there, particularly for critical accounting and finance roles, but the bar is higher, and the approval process is tighter than it was in a more aggressive hiring," Bonci said.

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This story was originally published May 6, 2026 at 4:37 PM.