New York City – The labor market in the United States showed strength in March, with hiring by U.S. companies surpassing expectations despite rising interest rates. According to the ADP National Employment Report released on Wednesday, companies added 184,000 jobs last month, marking the best month for job creation since July.
Wage growth also accelerated, with workers who switched jobs experiencing a 10% increase in pay – the largest advance since July. However, for workers who remained in their current jobs, wages climbed by 5.1%, unchanged from the previous month.
ADP chief economist Nela Richardson noted the surprising pay gains in various sectors in March, despite cooling inflation. Construction, financial services, and manufacturing workers saw the largest pay bumps during the month.
Job growth was broad-based across sectors, with the leisure and hospitality sector leading in job gains by onboarding 63,000 new workers in March. Additionally, substantial hiring gains were also reported in construction (33,000), trade, transportation, and utilities (29,000), and financial activities (17,000).
The stronger-than-expected report comes amidst an aggressive tightening campaign by the Federal Reserve, which has raised interest rates to the highest level since 2001. Central bank officials have indicated that they anticipate rate cuts later this year, pending more evidence that inflation is returning to their 2% target.
The data precedes the release of the more closely watched March jobs report from the Labor Department, expected to show employers hiring 200,000 workers following a gain of 275,000 in February. The unemployment rate is anticipated to hold steady at 3.9%.
It is important to note that ADP numbers may differ significantly from the official government count and have historically been considered an unreliable indicator of future trends. Investors and analysts are closely watching the labor market for signs of cooling that may prompt the Federal Reserve to adjust interest rates.