Private employers added 62,000 jobs in March, blowing past the 40,000 gain economists had forecast, according to the ADP National Employment Report released Wednesday.
The better-than-expected result was driven by the smallest businesses in America. Establishments with fewer than 20 employees added a striking 112,000 jobs, powering small business hiring gains for a second consecutive month. The burst of micro-firm hiring more than offset cautious headcount management at larger companies.
“Overall hiring is steady, but job growth continues to favor certain industries, including health care,” said Dr. Nela Richardson, ADP’s chief economist.
Workers continued to see wages outpace inflation.
Pay for job-stayers rose 4.5 percent year-over-year for the third straight month — more than double February’s 2.4 percent consumer price index — delivering real wage gains of roughly two percent. Workers who switched jobs fared even better, with pay increases accelerating to 6.6 percent, a sign that employers are competing aggressively for talent in high-demand sectors. The job-changer premium suggests confidence among workers willing to move and among businesses willing to pay up for the right hire.
Manufacturing workers saw pay gains of 4.9 percent, outpacing the national average despite the sector shedding 11,000 jobs. The above-average wage growth suggests manufacturers are investing in retaining and attracting skilled workers even as they adjust headcounts — a sign of a sector repositioning rather than retreating.
Construction added 30,000 positions and education and health services gained 58,000, reflecting strong domestic demand for building and health care workers. Natural resources and mining contributed 11,000 jobs. The information sector, which includes technology firms, added 16,000.
Trade, transportation, and utilities was the one weak spot, shedding 58,000 jobs, while manufacturing lost 11,000.
Regionally, the South dominated, adding 101,000 jobs, with the West South Central division — anchored by Texas — contributing 50,000 of those gains. The West added 16,000 jobs. The Northeast and Midwest saw declines.
ADP’s February figure was also revised upward, from 63,000 to 66,000, indicating the prior month’s labor market was slightly stronger than initially reported.
The better-than-expected report suggests that rising energy prices and concerns over the Iran war did not weigh on hiring in March.
The report sets the stage for Friday’s government employment report from the Bureau of Labor Statistics, which is expected to show a rebound from a February that was depressed by a major Kaiser Permanente strike and severe winter weather.
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