Flat Rock, North Carolina, parked tractor billboard with now employees, Ingles grocery store.
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Private sector job growth in March expanded at the fastest pace since July 2023, signaling continued momentum in the U.S. labor market, payroll processing company ADP said Wednesday.
Companies added 184,000 workers this month, up from an upwardly revised gain of 155,000 in February, 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 rose 5.1% from a year ago, the same rate as in February, following a steady easing that continued well into 2023.
“March was surprising, not just because of the wage increases, but also because of the sectors in which they were recorded,” said Nela Richardson, ADP’s chief economist. “Inflation is cooling, but our data shows wages are rising
both goods and services.”
Job growth was fairly broad-based, with 63,000 jobs, mainly in leisure and catering. Other sectors that showed significant increases included construction (33,000), trade, transportation and utilities (29,000) and education and healthcare (17,000). Professional and business services saw a loss of 8,000.
Service-related industries accounted for 142,000 of the total, with goods accounting for the remainder. ADP, whose research is based on analyzing payroll data from more than 25 million workers, does not track government jobs.
Most of the growth came from companies with more than 50 employees, while small businesses added just 16,000 employees to the total. From a regional perspective, the South recorded the largest gains, with an increase of 91,000 employees.
The ADP estimate serves as a precursor to the Department of Labor’s nonfarm payrolls survey, which will be released Friday, although the numbers often vary widely. The department’s Bureau of Labor Statistics reported job growth of 275,000 in February, or 120,000 more than even ADP’s revised figure. Economists polled by Dow Jones expect the March count to show a growth of 200,000.
Solid wage growth coupled with declining inflation has allowed the Federal Reserve to be patient in its approach to easing monetary policy. Central bank officials expect to start cutting 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 begin cuts.