American businesses added 184,000 new jobs in March, the biggest jump in hiring since July, paycheck company ADP said Wednesday.
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Private sector job growth improved during February though growth was slightly less than expected, payrolls processing firm ADP reported Wednesday.
Companies added 140,000 positions for the month, an increase from the upwardly revised 111,000 in January but a bit below the Dow Jones estimate for 150,000.
Job gains came across multiple areas, led by leisure and hospitality with 41,000 and construction, which added 28,000 positions. Other industries showing solid gains included trade, transportation and utilities (24,000), finance (17,000), and the other services category (14,000).
Of the total, 110,000 came from the services sector while goods producers added 30,000. Growth was concentrated among larger companies, as establishments with fewer than 50 employees contributed just 13,000 to the total.
Along with the job growth, annual pay increased 5.1% for those staying in their jobs, which ADP said was the smallest rise since August 2021, a potential indication that inflation pressures are receding.
The report comes with the labor market getting added attention for signals of whether U.S. economic growth will stall this year after gross domestic product posted a solid 2.5% annualized gain in 2023.
“Job gains remain solid. Pay gains are trending lower but are still above inflation,” said ADP’s chief economist, Nela Richardson. “In short, the labor market is dynamic, but doesn’t tip the scales in terms of a Fed rate decision this year.”
ADP’s report precedes the Labor Department’s official nonfarm payrolls release, which is scheduled for Friday. In recent months, ADP has consistently undershot the closely watched report from the Bureau of Labor Statistics, which showed an increase of 353,000 in January, more than triple the ADP estimate.
Economists surveyed by Dow Jones are expecting Friday’s report to show a rise of 198,000.
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Private payroll growth declined sharply in January, a possible sign that the U.S. labor market is heading for a slowdown this year, ADP reported Wednesday.
Companies added 107,000 workers in the first month of 2024, off from the downwardly revised 158,000 in December and below the Dow Jones estimate for 150,000, according to the payrolls processing firm.
Only one sector — information services (-9,000) — reported a decline, but hiring was slow across virtually all sectors.
Leisure and hospitality posted the biggest increase, with an addition of 28,000 workers, while trade, transportation and utilities added 23,000, and construction rose by 22,000. Services-providing companies were responsible for 77,000 jobs, with goods producers adding the rest.
The release comes two days ahead of the Labor Department’s nonfarm payrolls report, which is expected to show growth of 185,000, against the 216,000 increase in December. While the ADP data can provide a barometer for private sector hiring, the two reports often differ, with ADP often undershooting the Labor Department’s numbers.
On wage gains, ADP reported a 5.2% annual rise, a number that has run above the government’s measure of average hourly earnings.
“Wages adjusted for inflation have improved over the past six months, and the economy looks like it’s headed toward a soft landing in the U.S. and globally,” said ADP’s chief economist, Nela Richardson.
Midsize establishments, with between 50 and 499 employees, led job creation, adding 61,000. Small business added just 25,000.
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Private sector job creation slowed further in November and wages showed their smallest growth in more than two years, payrolls processing firm ADP reported Wednesday.
Companies added just 103,000 workers for the month, slightly below the downwardly revised 106,000 in October and missing the 128,000 Dow Jones estimate.
Along with the modest job growth came a 5.6% increase in annual pay, which ADP said was the smallest gain since September 2021. Job-changers saw wage increases of 8.3%, making the premium for switching positions the lowest since ADP began tracking the data three years ago.
After leading job creation for most of the period since Covid hit in early 2020, leisure and hospitality recorded a loss of 7,000 jobs for the month. Trade, transportation and utilities saw an increase of 55,000 positions, while education and health services added 44,000 and other services contributed 15,000.
Services-related industries provided all the job gains for the month, as goods-producers saw a net loss of 14,000 due to declines of 15,000 in manufacturing, despite the settlement in the United Auto Workers strikes, and 4,000 in construction. Recent layoffs in Silicon Valley and on Wall Street also did not show up in the data, as both sectors posted gains on the month.
“Restaurants and hotels were the biggest job creators during the post-pandemic recovery,” said ADP’s chief economist, Nela Richardson. “But that boost is behind us, and the return to trend in leisure and hospitality suggests the economy as a whole will see more moderate hiring and wage growth in 2024.”
Companies with between 50 and 499 employees led job creation, with an addition of 68,000. Small businesses contributed just 6,000.
The ADP report comes two days before the more widely watched nonfarm payrolls count from the Labor Department. The two reports can differ widely, though the numbers for private payrolls were close in October as the Labor Department reported growth of 99,000, just 7,000 below the revised ADP tally.
Including government jobs, nonfarm payrolls increased 150,000 in October and are expected to show growth of 190,000 in November, according to Dow Jones.
Another sign that the labor market is loosening came Tuesday, when the Labor Department reported that job openings declined to 8.73 million in October, the lowest level since March 2021.
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Correction: Annual pay increased 5.6%, which ADP said was the smallest gain since September 2021. An earlier version misstated the month. The Labor Department reported private payroll growth of 99,000 for October, just 7,000 below the revised ADP tally. An earlier version misstated a figure.