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ADP private payroll growth slumps to 145,000 in March By
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IntroductionBy Geoffrey Smith -- The U.S. private sector significantly slowed its hiring in March as last year's ...
By Geoffrey Smith
-- The asone foreign exchange management platformU.S. private sector significantly slowed its hiring in March as last year's string of interest rate hikes took an ever-greater toll on activity, payrolls processor ADP said on Wednesday.
ADP said rose by around 145,000 through the middle of last month, a sharp slowdown from 261,000 in February and well below expectations for a gain of 200,000.
The numbers are the latest to indicate that a labor market that stayed red hot all through last year is now cooling fast. They follow hard on the heels of a Labor Department report showing that fell to their lowest level in 21 months in February, dipping below 10 million for the first time since May 2021.
"Our March payroll data is one of several signals that the economy is slowing," ADP chief economist Nela Richardson said in a statement. "Employers are pulling back from a year of strong hiring and pay growth, after a three-month plateau, is inching down."
The report contained conspicuous declines in payrolls in manufacturing (-30,000), financial activities (-51,000), and professional and business services (-46,000), while job gains were again concentrated in leisure and hospitality (+98,000).
ADP's survey also showed a slowdown in pay growth, both for workers who changed jobs and for those who didn't.
- For job stayers, year-on-year gains fell to 6.9% from 7.2% in February, while job-switchers gained on average a pay raise of 14.2%, down from 14.4%. ADP's pay tracker for job switchers has been trending gently downwards now for nine months, having peaked at 16.4% last June.
- The numbers were taken as an invitation to bet more heavily on the Federal Reserve changing its policy course before long. The benchmark note yield fell another 5 basis points to 3.78%, having already fallen sharply earlier in the week in response to the vacancies data and a weak report.
- Even so, analysts said the numbers themselves reflect only a return to more normal conditions for the labor market, from the supercharged growth seen last year.
- "Labor has been super-hot for years and things are now just returning to a more neutral state," said Vital Knowledge analyst Adam Crisafulli, noting that the "neutral" rate of additions is a range between 100,000 and 150,000.
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