ADP said the private sector added 145k jobs in March, 65k less than expected, partly offset by an upward revision of 19k to the February print to 261k. Interestingly, it was small business that added most of the jobs, hiring a net 101k. Companies with more than 500 employees hired a net of just 10k and those with 250-499 people fired a net 42k. Pay growth moderated slightly. For ‘job stayers’, wages rose 7.2% y/o/y vs 6.9% in February while for ‘job changers’, pay was up 14.2% y/o/y, down one tenth m/o/m. Moderating but still pretty robust.
Notably weak was the service sector which hired just 75k people vs 190k in February, 109k in January and 213k in December. Leisure/hospitality again led most of the gains but education/health services saw a slowdown in hiring to 17k. Trade/transportation/utilities added 56k. There were outright job cuts in ‘information’, ‘financial activities’ and ‘professional/business services.’
With regards to the goods producing side, manufacturing lost 30k jobs, the 2nd biggest job loss since 2019 not including covid. Construction hired a net 53k and natural resources/mining added 47k.
Bottom line, ADP has been calculating a much slower pace of job gains for the private sector than the BLS has. For the 3 months ended February, the BLS said an average of 294k private sector jobs were added. ADP said it was 207k and then we get 145k today for March. Something has to give with the BLS data where 220k private sector jobs are expected for March to be seen on Friday. For the last 6 months, ADP has averaged 206k vs the 12 month average of 276k, a clear slowdown and ADP today said “Our March payroll data is one of several signals that the economy is slowing. Employers are pulling back from a year of strong hiring and pay growth, after a three month plateau, is inching down.”
The 2 yr yield was at 3.82% just before the print and is at 3.78-.79% as of this writing. The 10 yr yield is down by 2 bps from where it was right before the release. The dollar is down a touch and gold is approaching $2,050.