Payroll processing company ADP released statistics on Wednesday (5th) that private sector hiring slowed in March, flashing another potential sign that the U.S. economy is headed for a sharp slowdown or recession.
Business payrolls increased by only 145,000 this month, down from an upwardly revised 261,000 in February and from the “Dow Jones> An estimated 210,000.
That puts the average monthly hiring in Q1 at just 175,000, down from 216,000 in Q4, and a sharp drop from the 397,000 average in Q1 2022.
“March’s jobs data is one of several signs that the economy is slowing,” said Nela Richardson, chief economist at ADP. “Employers are pulling back from a year of strong hiring and wage increases; After a plateau in the past month, it has been slowly declining.”
Annual wage growth was 6.9 percent in March, down from 7.2 percent in February, according to calculations by ADP.
It is unusual for job growth to be split almost evenly between services and goods producers. The U.S. economy is overwhelmingly service-oriented, so that sector typically generates stronger job growth. Data released on Wednesday showed services and goods producers added 75,000 and 70,000 jobs, respectively.
Financial activity, however, shed 51,000 jobs last month, while professional and business services also lost 46,000. Manufacturing fell by 30,000.
On the plus side, leisure and hospitality added 98,000 workers, trade transportation and utilities added 56,000 and construction added 53,000. Natural resources and mining also rose by 47,000, while education and health services rose by 17,000.
From a size standpoint, small businesses with fewer than 50 employees added the most at 101,000, in stark contrast to the limited job growth seen at small businesses in recent months.
The ADP report is the outpost of the Labor Department’s non-farm payrolls report on Friday (7th). While ADP is often viewed as an indicator of broader employment trends, the two numbers can vary widely. ADP changed its methodology last year, resulting in about 100,000 fewer average monthly employment figures in 2022 than the government reported.
accept”Dow JonesEconomists surveyed by the survey expect Friday’s report to show nonfarm payrolls rose by 238,000 in March and the unemployment rate held at 3.6%.
