ADP Employment Report Echos February's Strong Numbers
- ADP says economy added roughly 200,000 private sector jobs in March
- Service providers continue to lead employment growth in the US
- Employment growth positive in the US amid Fed’s concerns over wage growth
Automatic Data Processing’s (ADP) employment report for March was released today, and boasted a similar pace of job growth to February by adding roughly 200,000 new jobs. Small business growth added nearly 50% of the jobs followed closely by medium-sized and finally large companies. The majority of employment growth was concentrated in service providing roles - roughly 191,000 of the net increase.
Looking into the breakdown for contributions, trade, transportation and utilities saw the largest contribution to job growth followed by professional and business services. Construction and financial services sector saw moderate growth while manufacturing saw the slowest growth of all the positive contributors.
ADP employment data’s influence is frequently bolstered by the fact that it precedes the frequently market-moving non-farm payroll data. Similar to the official NFPs, ADP carries a large sample size to provide an overview of the health in the labor sector. With the ADP modestly beating expectations (forecasts were for 195,000 new jobs), the consensus forecast for the BLS figures of 210,000 new jobs may shift in the speculative ranks.
Employment is one of the Federal Reserve’s dual mandates which it uses as a gauge for economic health and to determine necessary monetary policy. Continued positive growth in employment data could be a positive signal to traders, especially after Fed Chairwoman Janet Yellen signaled more caution moving forward.
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