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Private sector job growth increased in March at its fastest pace since July 2023, indicating continued strength in the U.S. labor market, payroll processing company ADP reported Wednesday.
Businesses added 184,000 workers during the month, an increase from February’s upwardly revised gain of 155,000, which was also the Dow Jones estimate for March.
In addition to the strong recovery in employment, ADP reported that wages for workers who remained in their jobs increased 5.1% from a year ago, the same rate as in February after having shown constant relaxation until 2023.
“The month of March was surprising not only in wage increases, but also in the sectors that recorded them,” said Nela Richardson, ADP chief economist. “Inflation has slowed, but our data shows wages are rising
both goods and services. »
Job gains were fairly broad-based, led by leisure and hospitality with 63,000. Other sectors showing significant increases included construction (33,000), trade, transportation and utilities (29,000). ) as well as education and health services (17,000). Professional and business services recorded a loss of 8,000 people.
Service-related industries accounted for 142,000 of the total, with goods providing the rest. ADP, whose survey is based on analysis of salary data for more than 25 million workers, does not track government jobs.
Most of the growth came from businesses that employ more than 50 workers, with small businesses adding only 16,000 total. From a regional perspective, the South saw the largest gains, with 91,000 additional workers.
The ADP estimate serves as a precursor to the Labor Department’s nonfarm payrolls survey, which is expected to be released Friday, although the numbers often diverge sharply. The department’s Bureau of Labor Statistics reported employment growth of 275,000 in February, 120,000 more than the ADP’s revised figure. Economists surveyed by Dow Jones expect the March count to show growth of 200,000 people.
Solid growth in payrolls as well as declining inflation have allowed the Federal Reserve to be patient in its approach to easing monetary policy. Central bank officials plan to start cutting interest rates later this year, but have said in recent days that they have not yet seen enough evidence that inflation is on a sustainably lower path to initiate reductions.
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