ADP Employment & Earnings Slow in March
by:Tom Moeller
|in:Economy in Brief
Summary
- Weaker-than-expected payroll gain follows February strength.
- Growth moderation stretches across company size; service sector hiring slows sharply.
- Pay increase weakens notably.
Nonfarm private sector payrolls increased 145,000 during March (2.4% y/y) after rising 261,000 in February, revised from 242,000. A 175,000 March increase was expected in the Action Economics Forecast Survey. During the last three months, payrolls rose an average 175,000 per month, the weakest increase in two years and down from a peak three-month average gain of 819,000 in September 2021.
Growth in median annual pay for "job stayers" of 6.9% y/y remained below a September high of 7.8% y/y. These gains compare to a low of 1.6% in March of 2021. The earnings increase was led by 9.6% y/y growth in leisure & hospitality earnings, down from 16.9% y/y growth in March 2022. Financial sector earnings rose a lessened 6.8% y/y. Factory sector pay rose 6.5% y/y, down from a high of 7.8% in September 2022. Professional & business service sector earnings rose a lessened 6.44% y/y.
Small businesses hiring (1-49 employees) rose 101,000 (0.7% y/y) following a greatly revised 174,000 February increase. Employment at firms with 50-499 employees rose 33,000 (4.6% y/y), the smallest increase since a decline in April 2021. The three-month average increase weakened to 86,000, half the February increase. Employment at large-sized firms rose 10,000 (2.1% y/y) last month, the weakest increase in four months.
By industry group, goods-producing employment rose 70,000 (1.6% y/y) after a 110,000 February gain. Factory sector jobs declined 30,000 (+1.4% y/y) after rising 7,000. It was the first decline since May 2021. Construction employment strengthened 53,000 (1.5% y/y), about the same as it did in February. Hiring in the natural resource & mining sector surged 47,000 (2.8% y/y) following a 53,000 February increase.
Service-producing jobs rose 75,000 last month (2.6% y/y), half the increase during February. The gain was the weakest since February 2021. Leisure & hospitality employment improved 98,000 (8.4% y/y) after rising 149,000 in February. Trade, transportation & utilities payrolls rose 56,000 (0.7% y/y) following a 114,000 increase. Education & health care sector employment improved 17,000 (2.7% y/y) after falling 6,000 in February. Information sector jobs eased 7,000 (0.1% y/y) after falling 33,000 in February. Professional & business services employment declined 46,000 (+2.1% y/y) after a 60,000 decline in February. Financial activities employment fell 51,000 (-0.5% y/y), down for the fourth straight month.
By Census region, employment in the West increased 95,000 (2.8% y/y) following a 128,000 February increase. Employment in the Northeast improved 141,000 (4.8% y/y) following a 166,000 February gain. Jobs in the Midwest rose 132,000 (2.1% y/y) after rising 93,000. In the South, the number of jobs declined 228,000 (+1.2% y/y) after a 119,000 shortfall.
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.
Interest rate volatility contributed to higher mortgage rates in 2022 from the Federal Reserve Bank of Dallas is available here.
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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