U.S. companies added 184,000 workers to their payrolls in March, the largest employment increase since July, according to payroll firm ADP.
Employment in March exceeded even the most optimistic forecasts. The median forecast was 155,000 jobs, with a range of 125,000 to 175,000.
Last month’s employment figure was revised upward from 140,000 to 155,000.
The growth in new jobs in March was led by leisure and hospitality, which added 63,000 jobs. The construction sector added 33,000 jobs, and the trade, transportation and utilities sector added 29,000 jobs.
Nine of the 10 business groups tracked by ADP added jobs, indicating strong demand for labor across the economy. Only professional and business services saw pay decreases.
All four regions of the country saw strong employment gains, led by the South, which added 91,000 jobs, and the West, which added 53,000 jobs. 28,000 workers were added to the payroll in the Midwest and 20,000 workers in the Northeast.
Employment in the services sector increased by 142,000, and employment in goods producers increased by 42,000.
Medium-sized businesses with 50 to 499 employees added 93,000 jobs. Large companies increased by 87,000 people. Small businesses added 16,000 jobs.
In addition to the significant increase in salary, there was also a significant increase in wages. Annual salaries increased 5.1% from the previous year, according to ADP. Wages for workers who changed jobs rose 10% from the previous year, marking the second consecutive year of increases. This indicates that employers are jacking up wages to lure employees away from their current jobs. Wage growth for those who left the company was 5.1% for the second consecutive month, ending months of slow wage growth.
The industries that saw the biggest year-on-year wage increases for workers who stayed on the job were construction, leisure and hospitality, and education and health care.
“March was surprising not only for wage increases, but also for the sectors that recorded them. Construction, financial services and manufacturing were the three industries with the largest increases in job changes,” ADP said. said Nella Richardson, Chief Economist. “While inflation is calming, our data shows that wages are rising for both goods and services.”
Stronger-than-expected job growth lends weight to the argument that the Federal Reserve can afford to hold off on cutting interest rates. Futures markets on Wednesday morning suggested there was a near zero chance of a rate cut at the May Fed meeting, a 58% chance of a June rate cut, and a 72% chance of a July rate cut. There is now a 90% chance that interest rates will be cut by September.
