Private sector hiring slowed in March, another potential sign that U.S. economic growth is slowing. headed for a sharp slowdown or recession based on today's ADP report.
Total company payrolls rose just 145,000 for the month, down from an upwardly revised 261,000 in February and below the Dow Jones estimate for 210,000.
This brought first quarter hiring to an average of just 175,000 jobs per month, down from 216,000 in the fourth quarter and a sharp reduction from the average of 397,000 in the first quarter of 2022.
"Our March payroll data is one of several signals that the economy is slowing," said ADP chief economist Nela Richardson. "Employers are starting to reduce hiring compared to last year".
Annual wages rose at a 6.9% rate in March, down from 7.2% in February, based on firm calculations.
Employment growth was almost equal between service and goods-producing firms, a rarity. The U.S. economy is highly service-oriented, so the sector generally produces stronger employment growth. Data released on Wednesday showed an increase of 75,000 in services and 70,000 in goods producers.
Last month, the financial industry lost 51,000 jobs and professional and business services fell by 46,000. Manufacturing also saw a decrease of 30,000.
The ADP report serves as a precursor to the NFP report from the Department of Labor. While ADP can serve as an indicator of broader employment trends, the two numbers can differ significantly.
Economists polled by Dow Jones expected Friday's report to show payrolls grew by 238,000 in March and the unemployment rate held at 3.6%.
