Private sector hiring totaled 62,000 in March, better than expected, ADP says
Private sector job growth was slightly better than expected in March, but health care and construction continued to provide nearly all the momentum, payroll processing company ADP reported Wednesday.
Employment growth totaled 62,000 for the month; It was down just 4,000 from the upwardly revised level in February, but above the Dow Jones consensus of 39,000. ADP’s report does not include government employees.
As in the February report, two main sectors made all the gains.
Education and health services contributed an equal 58,000 to the February total, while construction also contributed 30,000. The health care total was pulled back the previous month due to a strike at Kaiser Permanente that led to layoffs of more than 30,000 workers in Hawaii and California, which has since been resolved.
“We’ve seen two months in a row of pretty steady employment growth, but most of that has been in healthcare,” ADP chief economist Nela Richardson told CNBC. “That’s the real story. Health care is transforming the labor market.”
Elsewhere, information services added 16,000 jobs, while natural resources and mining added 11,000 jobs and entertainment and hospitality added 7,000 jobs.
On the downside, 58,000 jobs were lost in trade, transportation and utilities, while manufacturing decreased by 11,000 workers.
In an economy dominated by the services sector, March saw a rare balance in job creation: 30,000 for producers of goods and 32,000 for services.
Businesses with fewer than 50 employees also dominated hiring, adding 85,000 new jobs, while medium-sized businesses lost 20,000 jobs and large companies with 500 or more employees reported a decline of 4,000 jobs.
This was the second month in a row that small businesses led the way; This shift, Richardson said, could be due to the industry playing “catch up”, inflation effects and “the second or third job people need to keep up with the price levels that may come from the small firm sector”.
While the salary increase of those who stayed in their jobs remained constant at 4.5 percent, the salary increase of those who changed jobs was 6.6 percent, an increase of 0.3 points compared to February.
The report comes two days before the Bureau of Labor Statistics releases its nonfarm payrolls report. Wall Street’s forecast is for a gain of 59,000, following a loss of 92,000 reported in February. The unemployment rate is expected to remain stable at 4.4%.
In other economic news Wednesday, retail sales rose a solid 0.6% in February, following a 0.1% decline in January. This figure was above the estimate of 0.5 percent. Sales excluding automobiles increased by 0.5% against the expectation of 0.3%.
Additionally, the ISM manufacturing index recorded a slightly better-than-expected reading of 52.7, representing the percentage of firms reporting growth in March. However, the price index recorded a big increase, reaching 78.3, with an increase of 7.8 points, reaching its highest level since June 2022.
