ADP reported that manufacturers added 29,000 workers in March, the fastest monthly growth in employment in the sector since October 2014. This once again illustrates the robustness of the labor market in light of strong increases in manufacturing activity and improvements in the overall outlook. Indeed, manufacturing business leaders have hired at a healthy rate since the end of 2016, averaging nearly 15,700 per month over the past 15 months. In contrast, manufacturing employment was more sluggish in 2016, illustrating the turnaround in the labor market since then. More importantly, continued strength in job growth is expected moving forward.
Meanwhile, total nonfarm private employment increased by 241,000 in March, changing little from the 246,000 job gains added in February. It was the fifth consecutive month with job growth of at least 200,000 in the U.S. economy, according to ADP’s estimates. Over the past 15 months, nonfarm payrolls have risen by almost 197,000 workers per month, up from an average of nearly 172,500 per month in 2016.
In March, the largest employment growth included professional and business services (up 44,000), trade, transportation and utilities (up 40,000), construction (up 31,000), education and health services (up 28,000), leisure and hospitality (up 26,000), financial activities (up 18,000) and other services (up 17,000). Small and medium-sized businesses (i.e., those with fewer than 500 employees) accounted for 72.2 percent of the net job growth for the month.
On Friday, it is expected that similar labor market strength will be seen in the data from the Bureau of Labor Statistics (BLS), with the current consensus indicating an increase of around 180,000 nonfarm payrolls in March, as well as continued healthy job growth for manufacturers. In the BLS data, the sector added 31,000 workers in February, with an average of nearly 18,900 per month since the end of 2016.