A billboard showing tractor-trailers hiring for Ingalls Supermarket in Flat Rock, North Carolina.
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Payroll processing company ADP reported on Wednesday that private sector employment grew at the fastest pace since July 2023 in March, indicating continued prosperity in the U.S. labor market.
Companies added 184,000 employees this month, up from an upwardly revised 155,000 in February and the Dow Jones estimate for March.
In addition to the strong rebound in employment, ADP reported that wages for workers who remained on the job rose 5.1% from a year ago, the same increase as in February, after easing steadily throughout 2023. Those workers who switched jobs saw their wages increase by 10%. %, which is also higher than in previous months.
“Wage growth in March was surprising, and the industries recording wage gains were surprising,” said Nela Richardson, chief economist at ADP. “Inflation has been cooling, but our data shows that wages for goods and services It’s heating up.”
Employment growth was broad-based, led by the leisure and hospitality industry, which added 63,000 people. Other industries that saw significant growth included construction (33,000), trade, transport and utilities (29,000) and education and health services (17,000). Professional and business services lost 8,000 jobs.
Among them, the service industry accounts for 142,000, and the rest are goods industries. ADP’s survey is based on an analysis of salary data from more than 25 million workers and does not track government jobs.
Most of the growth came from companies employing more than 50 employees, while small businesses only added 16,000 to the total. From a regional perspective, the South experienced the largest increase, adding 91,000 workers.
The ADP estimate is a precursor to the Labor Department’s nonfarm payrolls survey due to be released on Friday, although the data tend to vary widely. The department’s Bureau of Labor Statistics reported that employment increased by 275,000 jobs in February, 120,000 more than even ADP’s revised figure. Economists polled by Dow Jones expected the number to rise by 200,000 in March.
Strong wage growth and easing inflation allow the Federal Reserve to remain patient in easing monetary policy. Central bank officials are expected to begin cutting interest rates later this year but have said in recent days that they have not yet seen enough evidence of persistently lower inflation to begin cutting rates.
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