US private sector employers brought back slightly more jobs than expected in March as the economy faced ongoing labor shortages and widespread vacancies.
Private sector payrolls rose by 455,000 in this past month, ADP said in its latest report Wednesday. Consensus economists were looking for 450,000 jobs to return, according to Bloomberg data. In February, employers brought back 486,000 payrolls, based on ADP’s upwardly revised monthly print.
The private services sector saw jobs return across a variety of industries, led by leisure and hospitality with payroll gains of 161,000. Education and health services jobs increased by 72,000, and professional and business services roles advanced by 61,000. In the goods-producing sector, jobs returned on net across each of mining, construction and manufacturing.
Job growth in the US private sector has decelerated in every month since December, when nearly 800,000 payrolls returned in a single month, based on ADP’s measures. Still, private payrolls have risen at a monthly rate well above pre-pandemic trends, even as the overall size of the US workforce still remains depressed compared to levels before the virus.
ADP’s report served as yet another affirmation of the strong momentum across the labor market, with private-sector job growth persisting for 23 consecutive months after a pandemic-related plunge into employment. However, widespread demand for labor and an elevated ratio of job openings to available workers has contributed further to the economy-wide inflationary pressures seen at present – leading some policymakers including Federal Reserve Chair Jerome Powell to now deem the labor market “tight to an unhealthy level. ”
Consumers have also taken note of the relative abundance of job openings. According to the Conference Board’s closely watched monthly consumer confidence report, a record high of 57.2% of consumers said jobs were “plentiful” in March. And just 9.8% said jobs were “hard to get,” with this proportion down from 12% a month earlier.
Later this week, the Labor Department’s “official” jobs report will likely further underscore the hot labor market conditions at present, with non-farm payrolls set to rise anew as the unemployment rate falls to a fresh pandemic-era low, based on consensus economists . Namely, Wall Street economists are looking for jobs to rise by nearly half a million in March as the unemployment rate steps down to 3.7%, from the 3.8% posted for February.
Though ADP’s report has tended to be an imperfect indicator of the ultimate payrolls figure in the government jobs report, it has often suggested at least directionally at the underlying trends in job growth. Still, especially during the pandemic, the gap in payrolls reported between the two surveys has been significant. In February, ADP reported 475,000 private payrolls returned, whereas the Labor Department reported 654,000, with these comprising most of the 678,000 total non-farm payroll gain during the month.
Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck
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