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April 3, 2024 – 6:14 AM PDT
(Reuters) – U.S. private payrolls increased more than expected in March, pointing to continued labor market strength.
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Private payrolls rose by 184,000 jobs last month, the most since last July, after advancing by an upwardly revised 155,000 in February, the ADP Employment report showed on Wednesday.
Economists polled by Reuters had forecast private employment increasing by 148,000 last month compared to the previously reported 140,000 in February.
Wages for workers remaining in their jobs increased 5.1% on a year-on-year basis, after a similar gain in February.
The leisure and hospitality industry led the nearly broad increase in hiring, with 63,000 jobs added. Construction payrolls increased by 33,000 jobs. But the professional and business services sector shed 8,000 positions.
Hiring increased in all four regions, and was spread across all business sizes. The ADP report, jointly developed with the Stanford Digital Economy Lab, was published ahead of the release on Friday of the Labor Department’s more comprehensive and closely watched employment report for March.
It has deviated considerably from the official employment data, often grossly exaggerating the labor market slowdown.
The labor market is gradually cooling following 525 basis points worth of interest rate hikes from the Federal Reserve since March 2022. Government data on Tuesday showed there were 1.36 job openings for every unemployed person in February compared to 1.43 in January.
“While we don’t think the ADP report should be viewed as a particularly reliable signal about the upcoming BLS report, we do think that the ADP data are consistent with the trend for job growth remaining solid into March,” said Daniel Silver, an economist at JPMorgan in New York.
According to a Reuters survey of economists, the Labor Department’s Bureau of Labor Statistics is expected to report that private payrolls rose by 160,000 jobs in March after increasing 223,000 in February.
Total nonfarm payrolls are estimated to have increased by 200,000 jobs in March after rising 275,000 in the prior month. The unemployment rate is forecast unchanged at 3.9%, and annual wage growth is seen slowing to 4.1% from 4.3% in February.
Reporting by Lucia Mutikani; Editing by Chizu Nomiyama and Andrea Ricci