Small companies reduced hiring in April, adding 61000 jobs

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April saw a noticeable slowdown in the creation of private sector jobs.

Mark Zandi, chief economist of Moody's Analytics said job growth slowed primarily due to a pullback in construction and retail jobs.

The ADP figures come ahead of the U.S. Labor Department's more comprehensive non-farm payrolls report at 8:30 a.m. (1230 GMT) on Friday.

"Looking across company sizes, midsized businesses showed persistent growth for the past six months", Yildirmaz said.

Medium businesses - those with 50-499 employees - were responsible for most of the hiring, adding 78,000 jobs.

The report, which covers 411,000 companies and 24 million workers, comes ahead of tomorrow's closely-watched USA employment data release, although the two reports can diverge widely.

The Roseland-based payroll and human resources company said overall US nonfarm private employment grew at a slower pace than in the first quarter of the year. Growth was just 0.7 percent at an annual rate in the first quarter, and auto sales slumped last month. A strengthening labour market is pushing central bankers to proceed with further interest-rate increases this year as they also work to pare the Fed's $4.5 trillion balance sheet.

The service-providing sector added 165,000 jobs, including 72,000 in professional and businesses services such as accounting and tax preparation. Construction hiring accelerated in the first two months of the year, when the weather was warmer than usual, and has leveled off since then. Leisure/hospitality added 35,000 jobs.

Economists surveyed by Reuters had forecast the ADP National Employment Report would show a gain of 175,000 jobs, with estimates ranging from 140,000 to 236,000.

There was an increase of 12,000 in the goods-producing sector from 82,000 previously as construction jobs declined slightly on the month.

Information for this article was contributed by Christopher S. Rugaber of The Associated Press and Michelle Jamrisko of Bloomberg News.