U.S. ADP Payroll Gain Rebounds in March; Pay Growth Eases
by:Tom Moeller
|in:Economy in Brief
Summary
- Employment increase is strong in both services & factory sectors.
- Wage growth for “job stayers” and “job changers” moderates.
- Small business employment recovers; hiring at medium-sized firms slows.
The ADP National Employment Report indicated that nonfarm private sector payrolls rose 155,000 (1.4% y/y) during March after increasing 84,000 in February, revised from 77,000, and 186,000 in January. The increase remained below the 221,000 high in October of last year. A 116,000 March rise in ADP employment had been expected in the Action Economics Forecast Survey.
Growth in median annual pay for "job stayers" eased to 4.6% y/y from 4.7% y/y in the prior two months and compared to 5.0% y/y one year earlier. It remained below a September 2022 high of 7.8% y/y. Manufacturing sector pay grew 4.8% y/y while construction sector pay improved 4.7% y/y. Natural resource & mining sector pay grew 4.3% y/y. Financial sector pay rose 5.3% y/y while education & health services pay rose 4.7% y/y. Leisure & hospitality pay also increased 4.7% y/y. Professional & business service sector pay increased 4.4% y/y and trade, transportation & utilities pay rose 4.3% y/y. Information pay rose 4.0% y/y. Median annual pay for “job changers” rose 6.5% y/y after 6.8% y/y growth in February and stood below a 16.1% y/y high in April 2022.
Small business hiring (less than 50 employees) rose 52,000 (0.7% y/y) in March, following no change in February. Employment at medium-sized firms (50-499,000 employees) rose 43,000 (1.1% y/y) after increasing 53,000 in February. Large business hiring (500+ employees) rose 59,000 (3.6% y/y) last month following a 33,000 February rise.
Goods-producing employment rose 24,000 (1.3% y/y), after rising 40,000 in February. Factory sector employment rose 21,000 (-0.2% y/y) following a 15,000 rise. The number of construction sector jobs rose 6,000 (3.6% y/y), following a 26,000 February increase. Natural resource & mining jobs fell 3,000 (+1.9% y/y), after a 1,000 decline.
The number of service-producing jobs rose 132,000 (1.4% y/y) last month, following a 43,000 February gain. Professional & business services employment grew 57,000 (0.7% y/y) last month following a 22,000 February increase. Employment in the financial industry rose 38,000 (2.0% y/y) after a 24,000 rise. Leisure and hospitality employment increased 17,000 (2.9% y/y), following a 47,000 February increase. Employment in “other” services rose 11,000 (3.5% y/y) in March, following an 18,000 gain in February. The number of education & health care jobs improved 12,000 (1.8% y/y), after a 25,000 decline during February. Information sector employment rose 3,000 (0.2% y/y) last month after a 12,000 decline. The number of jobs in trade, transportation & utilities fell 6,000 (+0.4% y/y) in January after a 31,000 decline during February.
By region, employment in the Northeast increased 89,000 (2.0% y/y) last month, after rising 40,000 in February. Employment in the Midwest rose 81,000 (1.4% y/y) following a 62,000 gain in February. In the South, employment increased 27,000 (1.4% y/y) following a 17,000 gain, but in the West, employment fell 41,000 (+0.6% y/y) in March, after a 32,000 February decline.
The ADP National Employment Report and Pay Insights data can be found in Haver's USECON database. Historical figures date back to January 2010 for private employment. Pay data date back to October 2020. The expectation figure is available in Haver's AS1REPNA database.
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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