Private sector job growth in March was slightly better than expected, but health care and construction continued to provide nearly all the momentum, payroll firm ADP reported on Wednesday.
Employment growth for the month totaled 62,000 jobs, down just 4,000 from February’s upwardly revised level, but above the Dow Jones consensus of 39,000. ADP’s report does not include government employees.
Similar to February’s report, two sectors delivered virtually all the gains.
Education and health services contributed 58,000 jobs (same as February’s total) and construction added 30,000 jobs. Total health care spending was subdued last month after the resolution of a strike at Kaiser Permanente that laid off more than 30,000 workers in Hawaii and California.
“We’ve had two months in a row of fairly steady job growth, most of it in health care,” Nella Richardson, chief economist at ADP, told CNBC. “That’s the real story: Healthcare is transforming the labor market.”
Among other sectors, information services added 16,000 jobs, natural resources and mining added 11,000 jobs, and leisure and hospitality added 7,000 jobs.
On the negative side, trade, transportation and utilities lost 58,000 jobs, while manufacturing lost 11,000 jobs.
In an economy dominated by services industries, job creation was unusually balanced in March, with 30,000 jobs created by goods producers and 32,000 jobs created in services.
Businesses with fewer than 50 employees also accounted for the majority of employment, with an increase of 85,000 employees, while medium-sized establishments reported a decrease of 20,000 jobs and large businesses with 500 or more employees reported a decrease of 4,000 jobs.
This is the second month in a row that small businesses have led the charge, and Mr Richardson said the change could mean the sector is “playing catch-up” as well as the impact of inflation, and could be “the second and third jobs that people need to catch up to the price levels that may come from the small business sector”.
The wage growth rate for those who stayed in their jobs was stable at 4.5%, but the wage growth rate for those who changed jobs was 6.6%, an increase of 0.3 points from February.
The report was released two days before the Bureau of Labor Statistics releases its nonfarm payrolls report. Wall Street forecast an increase of 59,000 jobs, following a decrease of 92,000 reported in February. The unemployment rate is expected to remain stable at 4.4%.
In other economic news Wednesday, retail sales rose a solid 0.6% in February, after falling 0.1% in January. This number was higher than the expected 0.5%. Excluding automobiles, sales rose 0.5%, compared to the expected 0.3% increase.
Additionally, the ISM Manufacturing Business Index was slightly higher than expected at 52.7, indicating the percentage of companies reporting economic expansion in March. However, the price index rose significantly, increasing by 7.8 points to 78.3, the highest level since June 2022.
