Automated Data Processing (ADP) reported that nonfarm payrolls rose 158,000 in March, below the consensus estimate of 215,000. At the same time, data for January and February were revised, with 176,000 additional workers in January, down from the earlier estimate of 215,000 and 238,000 new employees in February, up from 198,000. These two revisions essentially offset one another.
The average nonfarm payroll gain over the past six months was 200,833 additional workers per month. This was almost double the 107,500 per month average pace of the six months prior to that, suggesting a pickup in hiring in recent months.
With that said, it is also clear that the pace of hiring for manufacturers remains weak. There were 6,000 additional manufacturing workers on net in March. The manufacturing data were also revised, with a net loss of 5,000 workers in January (a swing from the original gain of 2,000 workers) and 9,000 additional employees in February which was unchanged. Manufacturing employment has been very soft since May 2012, with a net gain of just 8,000 workers in the sector over the past 11 months, according to the ADP data.
The bulk of the jobs added in March came from the services sector. The service-providing sectors added 151,000 net new workers in the month, with goods-producing industries providing the other 7,000 employees. Among the winners were professional and business services (up 39,000); trade, transportation, and utilities (up 22,000); and financial activities (up 9,000). Construction employment was flat.
In terms of firm size, small and medium-sized entities (e.g., those with less than 500 employees) accounted for 111,000, or 70 percent, of the net new jobs added in March.
We will receive official government data on employment from the Bureau of Labor Statistics on Friday. The consensus estimate is for 200,000 additional nonfarm workers in March, with manufacturing job gains continuing to be soft.
Chad Moutray is chief economist, National Association of Manufacturers.