The U.S. economy added 241,000 private, non-farm jobs in March according to the monthly employment report released today by payroll-management firm ADP and its partner Moody's Analytics. The seasonally adjusted result is 2.03-percent lower than February's upwardly revised addition of 246,000 jobs, and marks a 97 percent increase from last March, when 122,000 jobs were created.
“The job market is rip-roaring," said Mark Zandi, chief economist of Moody's Analytics in a press release. "Monthly job growth remains firmly over 200,000, double the pace of labor force growth, [and] the tight labor market continues to tighten.”
In a conference call this morning, Zandi buoyed concerns about the potential negative impact of steel and aluminum tariffs on employment and the economy as a whole.
"The impact of tariffs on the labor market has been minimal, and in the grand scheme of things, the impact should be small," Zandi said. "By my estimate, [the tariffs] will shave roughly 0.1 to 0.2 percent off gross domestic product growth in the next year, but we're still on track to see 3 percent growth in 2018."
Zandi also addressed concerns about the rate of wage growth relative to employment growth. Nominal wages increased slowly during 2017 despite a low unemployment rate, and growth was inconsistent across multiple industries.
"Wage growth has started to pick up in 2018, and is [appropriate] relative to employment growth," Zandi said. "We're on track to [see growth of hourly earnings] closer to 3 percent year-over-year."
Small businesses—firms that employ between one and 49 employees—gained 47,000 jobs in March. Within that data set, firms that employ fewer than 20 people gained 35,000 jobs, and firms that have 20 to 49 employees added 12,000 jobs. Mid-sized businesses—those with 50 to 499 employees—accounted for the largest share of employment gains by company size for the fifth consecutive month, with 127,000 positions added last month. Large businesses consisting of 500 employees or more added 67,000 jobs. Within that figure, businesses employing 500 to 999 people gained 13,000 jobs, and companies with 1,000 or more employees added 54,000 jobs.
"We saw impressive momentum in the first quarter of 2018 with more jobs added per month on average than in 2017,” said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute in a press release. "Midsized businesses added nearly half of all jobs this month, the best growth this segment has seen since the fall of 2014."
The service-providing sector—which has anchored the ADP's job report for 12 consecutive months—contributed 73 percent (176,000) of total job gains in March. The service-providing sector includes jobs in professional and business services; trade/transportation/utilities; information; financial activities; education and health; leisure and hospitality; and other services. Six of the seven subsectors experienced growth in March, with only the education subsector reporting a decrease of 1,000 jobs. The information subsector, which experienced job losses for six consecutive months prior to the March report, reported an increase of 3,000 jobs last month.
The professional and business services subsector—which includes architecture and engineering firms—has been on an upward trajectory for the past year. Employment in the subsector continued to grow last month, with the addition of 44,000 jobs, accounting for 25 percent of all service-providing sector jobs added in March.
The goods-producing sector, which includes jobs in natural resources and mining, construction, and manufacturing, added 65,000 jobs. Employment in the sector has continued to improve since June 2017, when the sector reported net-zero job growth due to significant losses in construction employment. The construction subsector has added an average of 28,000 jobs during the first three months of 2018, and saw an increase of 31,000 jobs in March, accounting for 47.7 percent of all jobs added in the goods-producing sector last month. Employment in the natural resources/mining subsector was modest, with the addition of 5,000 employees, while the manufacturing subsector added 29,000 new positions. According to Yildirmaz, the increase in manufacturing employment during March marks the strongest monthly gains seen in more than three years.
ADP's national employment report is often used as a precursor for the monthly Bureau of Labor Statistics (BLS) jobs report, which will release its March edition on Friday. Zandi made a technical point that gains in BLS' report on Friday could come in soft relative to ADP, due to a series of storms in the northeast that occurred during survey week for the employment report.
For more information, read the full employment report from ADP.
