ADP National Employment Report: Private Sector Employment Increased by 184,000 Jobs in March; Annual Pay was Up 5.1%

Rhea-AI Summary

The March ADP National Employment Report reveals a significant increase of 184,000 jobs and a 5.1% annual pay rise. The report highlights job gains in sectors like construction, financial services, and manufacturing, with notable pay increases in goods and services.

Insights

Economist

The increase of 184,000 jobs in the private sector for March indicates a robust labor market, particularly noteworthy given the global economic uncertainties. The uptick in hiring, especially in leisure and hospitality, suggests consumer confidence and discretionary spending remain strong. However, the decline in professional services hiring could signal a shift in business priorities or a saturation in demand for these roles.

The regional data points to a heterogeneous economic recovery, with some areas like the South and the West showing more significant employment gains than the Northeast and Midwest. This could influence regional investment strategies and inform decisions on business expansions or contractions.

Increased pay for job-changers by 10% may be indicative of a competitive labor market where talent retention is challenging. This trend could lead to higher operational costs for businesses, potentially affecting profit margins and investment in growth initiatives.

Human Resources Specialist

The report's insights into pay gains offer a nuanced view of the current labor dynamics. The flat annual pay gains for job-stayers at 5.1% could suggest a ceiling in wage growth or a strategic cap by employers to manage expenses. In contrast, the dramatic rise in pay for job-changers highlights the leverage employees hold in negotiating salaries when moving between companies.

The sector-specific pay gains in construction, financial services and manufacturing reflect industry-specific demand for skilled workers. Companies in these sectors may need to review their compensation strategies to attract and retain talent, which could lead to internal wage inflation and necessitate budget adjustments.

Lastly, the disparity in pay gains between small, medium and large firms provides insights into the scalability of business operations. Smaller firms may face more significant challenges in matching the pay increases offered by larger competitors, affecting their ability to compete for skilled labor.

Market Research Analyst

The labor market's performance, as indicated by the ADP National Employment Report, can have ripple effects across various industries. For instance, the surge in hiring within the leisure and hospitality sector could be a bellwether for related industries such as food services, travel and entertainment. Investors might look at companies in these sectors for potential growth opportunities.

Additionally, the increased hiring in goods-producing sectors like construction could signal an upswing in residential and commercial building projects, which would benefit related industries, from raw materials to home furnishings. However, this growth must be balanced against potential inflationary pressures from wage increases.

The report's implications for stock market performance are multifaceted. While job growth and wage increases can translate into higher consumer spending, they can also result in increased labor costs for companies. Investors need to weigh these factors when assessing company valuations and future earnings potential.

ROSELAND, N.J., April 3, 2024 /PRNewswire/ -- Private sector employment increased by 184,000 jobs in March and annual pay was up 5.1 percent year-over-year, according to the March ADP^® National Employment Report™ produced by the ADP Research Institute^® in collaboration with the Stanford Digital Economy Lab ("Stanford Lab"). The ADP National Employment Report is an independent measure and high-frequency view of the private-sector labor market based on actual, anonymized payroll data of more than 25 million U.S. employees.

The jobs report and pay insights use ADP's fine-grained anonymized and aggregated payroll data to provide a representative picture of the private-sector labor market. The report details the current month's total private employment change, and weekly job data from the previous month. Because the underlying ADP payroll databases are continuously updated, the report provides a high-frequency, near real-time measure of U.S. employment. This measure reflects the number of employees on ADP client payrolls (Payroll Employment) to provide a richer understanding of the labor market. ADP's pay measure uniquely captures the earnings of a cohort of almost 10 million employees over a 12-month period.

"March was surprising not just for the pay gains, but the sectors that recorded them. The three biggest increases for job-changers were in construction, financial services, and manufacturing," said Nela Richardson, chief economist, ADP. "Inflation has been cooling, but our data shows pay is heating up in both goods and services."

March 2024 Report Highlights*

View the ADP National Employment Report and interactive charts at www.adpemploymentreport.com.

JOBS REPORT

Private employers added 184,000 jobs in March
Last month saw the biggest jump in hiring since July, led by leisure and hospitality. Job gains were strong across industries with the exception of professional services, where hiring fell.

Change in U.S. Private Employment:     184,000

Change by Industry Sector

- Goods-producing:     42,000

• Natural resources/mining     8,000
• Construction     33,000
• Manufacturing     1,000

- Service-providing:     142,000

• Trade/transportation/utilities     29,000
• Information     8,000
• Financial activities     17,000
• Professional/business services     -8,000
• Education/health services     17,000
• Leisure/hospitality     63,000
• Other services     16,000

Change by U.S. Regions

- Northeast:     20,000

• New England     -1,000
• Middle Atlantic     21,000

- Midwest:     28,000

• East North Central     12,000
• West North Central     16,000

- South:     91,000

• South Atlantic     49,000
• East South Central     26,000
• West South Central     16,000

- West:     53,000

• Mountain     21,000
• Pacific     32,000

Change by Establishment Size

- Small establishments:     16,000

• 1-19 employees     27,000
• 20-49 employees     -11,000

- Medium establishments:     93,000

• 50-249 employees     63,000
• 250-499 employees     30,000

- Large establishments:     87,000

• 500+ employees     87,000

PAY INSIGHTS

Pay gains for job-changers jumped in March
For job-stayers, year-over-year pay gains were flat at 5.1 percent after months of steady deceleration. At the same time, gains for job-changers rose dramatically to 10 percent, the second straight increase.

Median Change in Annual Pay (ADP matched person sample)

- Job-Stayers     5.1%

- Job-Changers     10.0%

Median Change in Annual Pay for Job-Stayers by Industry Sector

- Goods-producing:                                                       

• Natural resources/mining     4.7%
• Construction     5.7%
• Manufacturing     4.6%

- Service-providing:                                               

• Trade/transportation/utilities     4.7%
• Information     4.8%
• Financial activities     5.3%
• Professional/business services     5.0%
• Education/health services     5.7%
• Leisure/hospitality     5.8%
• Other services     5.6%

Median Change in Annual Pay for Job-Stayers by Firm Size

- Small firms:                                                                

• 1-19 employees     4.7%
• 20-49 employees     5.2%

- Medium firms:                                                             

• 50-249 employees     5.3%
• 250-499 employees     5.1%

- Large firms:                                                                

• 500+ employees     4.9%

To see Pay Insights by U.S. State, Gender, and Age for Job-Stayers, visit here:

* Sum of components may not equal total, due to rounding.

The February total of jobs added was revised from 140,000 to 155,000. The historical data file, and weekly data for the previous month, is available at https://adpemploymentreport.com/.

To subscribe to monthly email alerts or obtain additional information about the ADP National Employment Report, including employment and pay data, interactive charts, methodology, and a calendar of release dates, please visit https://adpemploymentreport.com/.    

The April 2024 ADP National Employment Report will be released at 8:15 a.m. ET on May 1, 2024.

About the ADP® National Employment Report™
The ADP National Employment Report is an independent measure of the change in U.S. private employment and pay derived from actual, anonymized payroll data of client companies served by ADP, a leading provider of human capital management solutions. The report is produced by ADP Research Institute in collaboration with the Stanford Digital Economy Lab.

The ADP National Employment Report is broadly distributed to the public each month, free of charge, as part of the company's commitment to offering deeper insights of the U.S. labor market and providing businesses and governments with a source of credible and valuable information.

About the ADP Research Institute®
The ADP Research Institute delivers data-driven discoveries about the world of work and derives reliable economic indicators from these insights. We offer these findings as a unique contribution to making the world of work better and more productive by delivering actionable insights to the economy at large.

About ADP (NASDAQ – ADP)
Designing better ways to work through cutting-edge products, premium services and exceptional experiences that enable people to reach their full potential.  HR, Talent, Time Management, Benefits and Payroll. Informed by data and designed for people.   Learn more at ADP.com

ADP, the ADP logo, and Always Designing for People, ADP National Employment Report, and ADP Research Institute are registered trademarks of ADP, Inc. All other marks are the property of their respective owners.

Copyright © 2024 ADP, Inc. All rights reserved.

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SOURCE ADP, Inc.

FAQ

How many jobs were added by private employers in March according to the ADP National Employment Report?

Private employers added 184,000 jobs in March according to the ADP National Employment Report.

Which sectors saw the biggest pay gains in March according to the ADP National Employment Report?

The sectors with the biggest pay gains in March were construction, financial services, and manufacturing according to the ADP National Employment Report.

What was the percentage increase in annual pay for job-stayers in March according to the ADP National Employment Report?

The percentage increase in annual pay for job-stayers was 5.1% in March according to the ADP National Employment Report.

How did job-stayers and job-changers compare in terms of median annual pay change in March according to the ADP National Employment Report?

Job-stayers had a median annual pay change of 5.1%, while job-changers had a median annual pay change of 10.0% in March according to the ADP National Employment Report.