Private sector job growth expanded in March at the fastest pace since July 2023, indicating continued prosperity in the U.S. labor market, payroll processing company ADP said Wednesday.
Companies added 184,000 workers on a monthly basis, up from an upwardly revised February gain of 155,000 workers, which was also the Dow Jones estimate for March.
In addition to the strong rebound in employment, ADP reported that wages for workers who remained in their jobs increased 5.1% from a year ago, the same rate as February after showing steady easing going back to 2023. Those who change jobs saw a 10% gain. %, which is also higher than in previous months.
“March was a surprising month not only for wage gains, but also for the sectors that recorded them,” said Nella Richardson, chief economist at ADP. “Inflation has started to ease, but our data shows that wages are rising in both goods and services.”
Job gains were fairly broad, led by leisure and hospitality with 63,000. Other sectors that showed significant increases included construction (33,000), trade, transportation and utilities (29,000), and education and health services (17,000). Professional and business services saw a loss of $8,000.
Service-related industries accounted for 142,000 of the total, while goods provided the rest. ADP, whose survey is based on an analysis of payroll data for more than 25 million workers, does not track government jobs.
Most of the growth came from companies employing more than 50 workers, with small businesses adding just 16,000 workers to the total. From a regional perspective, the South saw the largest gains, adding 91,000 workers.
The ADP estimates are a lead-in to the Labor Department's nonfarm payrolls survey, which is scheduled to be released on Friday, though the numbers often vary sharply. The department's Bureau of Labor Statistics reported job growth of 275,000 jobs in February, or 120,000 more than the revised figure released by ADP. Economists surveyed by Dow Jones expect the March census to show growth of 200,000.
Strong payroll growth coupled with improving inflation has allowed the Federal Reserve to be patient in its approach to easing monetary policy. Central bank officials expect to start cutting interest rates later this year, but have said in recent days they have not seen enough evidence yet that inflation is on a sustainable downward path to initiate cuts.
