ADP National Employment Report: Private Sector Employment Increased by 184,000 Jobs in March; Annual Pay was Up 5.1%
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The increase of 184,000 jobs in the private sector for March indicates a robust labor market, particularly noteworthy given the global economic uncertainties. The uptick in hiring, especially in leisure and hospitality, suggests consumer confidence and discretionary spending remain strong. However, the decline in professional services hiring could signal a shift in business priorities or a saturation in demand for these roles.
The regional data points to a heterogeneous economic recovery, with some areas like the South and the West showing more significant employment gains than the Northeast and Midwest. This could influence regional investment strategies and inform decisions on business expansions or contractions.
Increased pay for job-changers by 10% may be indicative of a competitive labor market where talent retention is challenging. This trend could lead to higher operational costs for businesses, potentially affecting profit margins and investment in growth initiatives.
The report's insights into pay gains offer a nuanced view of the current labor dynamics. The flat annual pay gains for job-stayers at 5.1% could suggest a ceiling in wage growth or a strategic cap by employers to manage expenses. In contrast, the dramatic rise in pay for job-changers highlights the leverage employees hold in negotiating salaries when moving between companies.
The sector-specific pay gains in construction, financial services and manufacturing reflect industry-specific demand for skilled workers. Companies in these sectors may need to review their compensation strategies to attract and retain talent, which could lead to internal wage inflation and necessitate budget adjustments.
Lastly, the disparity in pay gains between small, medium and large firms provides insights into the scalability of business operations. Smaller firms may face more significant challenges in matching the pay increases offered by larger competitors, affecting their ability to compete for skilled labor.
The labor market's performance, as indicated by the ADP National Employment Report, can have ripple effects across various industries. For instance, the surge in hiring within the leisure and hospitality sector could be a bellwether for related industries such as food services, travel and entertainment. Investors might look at companies in these sectors for potential growth opportunities.
Additionally, the increased hiring in goods-producing sectors like construction could signal an upswing in residential and commercial building projects, which would benefit related industries, from raw materials to home furnishings. However, this growth must be balanced against potential inflationary pressures from wage increases.
The report's implications for stock market performance are multifaceted. While job growth and wage increases can translate into higher consumer spending, they can also result in increased labor costs for companies. Investors need to weigh these factors when assessing company valuations and future earnings potential.
The jobs report and pay insights use ADP's fine-grained anonymized and aggregated payroll data to provide a representative picture of the private-sector labor market. The report details the current month's total private employment change, and weekly job data from the previous month. Because the underlying ADP payroll databases are continuously updated, the report provides a high-frequency, near real-time measure of
"March was surprising not just for the pay gains, but the sectors that recorded them. The three biggest increases for job-changers were in construction, financial services, and manufacturing," said Nela Richardson, chief economist, ADP. "Inflation has been cooling, but our data shows pay is heating up in both goods and services."
March 2024 Report Highlights*
View the ADP National Employment Report and interactive charts at www.adpemploymentreport.com.
JOBS REPORT
Private employers added 184,000 jobs in March
Last month saw the biggest jump in hiring since July, led by leisure and hospitality. Job gains were strong across industries with the exception of professional services, where hiring fell.
Change in
Change by Industry Sector
- Goods-producing: 42,000
- Natural resources/mining 8,000
- Construction 33,000
- Manufacturing 1,000
- Service-providing: 142,000
- Trade/transportation/utilities 29,000
- Information 8,000
- Financial activities 17,000
- Professional/business services -8,000
- Education/health services 17,000
- Leisure/hospitality 63,000
- Other services 16,000
Change by
- Northeast: 20,000
- New England -1,000
- Middle Atlantic 21,000
- Midwest: 28,000
- East North Central 12,000
- West North Central 16,000
- South: 91,000
- South Atlantic 49,000
- East South Central 26,000
- West South Central 16,000
- West: 53,000
- Mountain 21,000
- Pacific 32,000
Change by Establishment Size
- Small establishments: 16,000
- 1-19 employees 27,000
- 20-49 employees -11,000
- Medium establishments: 93,000
- 50-249 employees 63,000
- 250-499 employees 30,000
- Large establishments: 87,000
- 500+ employees 87,000
PAY INSIGHTS
Pay gains for job-changers jumped in March
For job-stayers, year-over-year pay gains were flat at 5.1 percent after months of steady deceleration. At the same time, gains for job-changers rose dramatically to 10 percent, the second straight increase.
Median Change in Annual Pay (ADP matched person sample)
- Job-Stayers
- Job-Changers 10.
Median Change in Annual Pay for Job-Stayers by Industry Sector
- Goods-producing:
- Natural resources/mining
4.7% - Construction
5.7% - Manufacturing
4.6%
- Service-providing:
- Trade/transportation/utilities
4.7% - Information
4.8% - Financial activities
5.3% - Professional/business services
5.0% - Education/health services
5.7% - Leisure/hospitality
5.8% - Other services
5.6%
Median Change in Annual Pay for Job-Stayers by Firm Size
- Small firms:
- 1-19 employees
4.7% - 20-49 employees
5.2%
- Medium firms:
- 50-249 employees
5.3% - 250-499 employees
5.1%
- Large firms:
- 500+ employees
4.9%
To see Pay Insights by
* Sum of components may not equal total, due to rounding.
The February total of jobs added was revised from 140,000 to 155,000. The historical data file, and weekly data for the previous month, is available at https://adpemploymentreport.com/.
To subscribe to monthly email alerts or obtain additional information about the ADP National Employment Report, including employment and pay data, interactive charts, methodology, and a calendar of release dates, please visit https://adpemploymentreport.com/.
The April 2024 ADP National Employment Report will be released at 8:15 a.m. ET on May 1, 2024.
About the ADP® National Employment Report™
The ADP National Employment Report is an independent measure of the change in
The ADP National Employment Report is broadly distributed to the public each month, free of charge, as part of the company's commitment to offering deeper insights of the
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