Personal payrolls rose 145,000 in March, below expectations, ADP says

An employment sign is seen at a Dollar General convenience store on March 10, 2023 in Austin, Texas.

Brandon Bell | Getty Images

Private-sector hiring slowed in March, another sign that U.S. economic growth is headed for a sharp slowdown or slowdown, the payrolls agency reported on Wednesday.

The company’s payroll rose by 145,000 in the month, up from a revised 261,000 in February and below the Dow Jones estimate for 210,000.

That’s down from 216,000 in the fourth quarter and an average of just 175,000 jobs per month compared to an average of 397,000 in the first quarter of 2022.

“Our March payrolls data is one of many signs that the economy is slowing,” said ADP chief economist Nella Richardson. “Employers are pulling back from a year of strong hiring and wage growth. After three months of plateauing, it’s slowing.”

Annual payrolls rose 6.9 percent in March, down from 7.2 percent in February, according to company calculations.

Job growth was evenly split between services and goods-producing firms, a rare occurrence. The U.S. economy is service-oriented, so the sector generally produces stronger employment gains. Data released on Wednesday showed a gain of 75,000 in services and 70,000 in goods producers.

Last month, however, financial activities lost 51,000 jobs and professional and business services declined by 46,000. Manufacturing also showed a decrease of 30,000.

On the positive side, leisure and hospitality added another 98,000 workers, trade, transportation and utilities grew by 56,000, and construction grew by 53,000. Natural resources and mining increased by 47,000; Education and health services also increased by 17,000.

In terms of size, companies with fewer than 50 employees led the way with 101,000, indicating that small businesses have seen limited job growth in recent months.

The ADP report serves as a precursor to Friday’s nonfarm payrolls report from the Labor Department. Although ADP can be used as an indicator of the broader employment trend, the two numbers can differ significantly. ADP changed its methodology last year, and the number was on average about 100,000 less per month than the government in 2022.

Economists polled by Dow Jones expected Friday’s report to show payrolls rose by 238,000 in March and the unemployment rate to remain at 3.6 percent.

Leave a Reply

Your email address will not be published. Required fields are marked *