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Economy in Brief

U.S. ADP Nonfarm Private Payrolls Strengthen in March
by Tom Moeller  March 31, 2021

• Job gains follow a weather-depressed February plus vaccination expansion.

• Improvement is wide-spread amongst company size.

• Factory & construction workforces reverse February declines.

The rate of job market improvement rose last month as businesses re-opened and expanded hours, and the number of Covid-19 vaccinations grew. The ADP National Employment Report indicated that nonfarm private sector payrolls increased 517,000 (-6.8% y/y) during March after rising 176,000 in February, revised from 117,000. January's change was little-revised at 196,000. A 525,000 March rise had been expected in the Action Economics Forecast Survey.

Medium-sized payrolls increased 188,000 last month (-7.0% y/y) following a 78,000 February rise, revised from 57,000. Small-sized payrolls improved 174,000 (-4.5% y/y) after gaining 48,000 in February, revised from 32,000. Large-sized payrolls increased 155,000 (-8.0% y/y after a 50,000 February increase, revised from 28,000.

Within industry sectors, private service employment increased 437,000 last month (-7.4% y/y) after a 187,000 rise, revised from 131,000. A 169,000 surge (-22.0% y/y) in leisure & hospitality hiring followed a 51,000 February gain and was the largest increase in nine months. Jobs in trade, transportation & utilities rose 92,000 (-4.5% y/y) after increasing 61,000 in February. An 83,000 rise (-5.5% y/y) in the number of professional business services jobs was the largest increase in six months. The number of education & health services jobs rose 68,000 (-3.9% y/y) and have risen in each month since May. Jobs in financial services rose 9,000 (-1.6% y/y) after increasing roughly 3,000 during each of the prior three months. The number of information sector jobs fell 7,000 (-10.6% y/y), down for the fifth straight month.

Employment amongst goods-producing firms rebounded 80,000 (-3.9% y/y) after falling 11,000 in February, revised from -14,000. The number of factory sector jobs strengthened 49,000 last month (-4.3% y/y) after falling 7,000. The size of construction sector payrolls rose 32,000 (-2.7% y/y) following a 6,000 February decrease. Employment in the natural resource & mining sector edged 1,000 lower (-8.9% y/y) in March after increasing 3,000.

The Automatic Data Processing Research Institute survey covers 411,000 companies and includes about one-fifth of U.S. private payroll employment. The data are processed by Moody's Analytics Inc., then calibrated and aligned with the BLS establishment survey data. The ADP data cover private sector employment only.

The ADP National Employment Report data can be found in Haver's USECON database. Historical figures date back to 2001 for private employment and the industry breakdown, and 2005 for the business size breakout. The expectation figure is available in Haver's AS1REPNA database.

Capital Flow Surges and Rising Income Inequality from the Federal Reserve Bank of San Francisco can be found here.

ADP/Moody's National Employment Report Mar Feb Jan Mar Y/Y % 2020 2019 2018
Nonfarm Private Payroll Employment (m/m chg, 000s) 517 176 196 -6.8 -6.4 1.4 1.9
 Small Payroll (1-49) 174 48 55 -4.5 -5.8 0.2 0.8
 Medium Payroll (50-499) 188 78 87 -7.0 -7.2 1.9 2.2
 Large Payroll (>500) 155 50 55 -8.0 -6.3 1.7 2.4
Goods-Producing 80 -11 14 -3.9 -4.1 1.5 3.0
  Construction 32 -6 5 -2.7 -2.5 2.5 4.4
  Manufacturing 49 -7 9 -4.3 -4.7 1.0 2.1
Service-Producing 437 187 182 -7.4 -6.8 1.3 1.7
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