U.S. private sector employers continued to add to their payrolls in March despite notable contractions in financial services, professional and business services, and manufacturing, according to data from the ADP National Employment Report released Wednesday.
Employment in the nonfarm private sector rose by 145,000 in March. That’s a slowdown from the 261,000 recorded for February, an upward revision from the 242,000 estimated earlier. The ADP report for January shows the private sector added 119,000 workers to payrolls.
Silicon Valley Bank and Signature Bank failed in March and were taken into receivership by the Federal Deposit Insurance Corp., sending shockwaves through the banking system and prompting the FDIC and the Federal Reserve to implement emergency measures to stave off a broader run on bank deposits. Those measures appear to have stabilized the sector.
Jobs in financial activities fell by 51,000 in March, according to ADP, after rising by 62,000 in February. Businesses in professional and business services shed 46,000 jobs after shrinking by 36,000 in January. Information jobs declined by 7,000, much lower than headlines about layoffs in the tech sector have suggested.
The services sector overall grew by 75,000 jobs, a slowdown from the 190,000 added in February. Leisure and hospitality payrolls grew by 98,000, a pickup from the 83,000 hired in February. Trade, transportation, and utilities employment rose by 56,000, up from 3,000 in February. Education and health services added 17,000 jobs, around half of last month’s total.
“Our March payroll data is one of several signals that the economy is slowing,” said Nela Richardson, chief economist at ADP. “Employers are pulling back from a year of strong hiring and pay growth, after a three-month plateau, is inching down.”
The good-producing sector added 70,000 jobs. Jobs were up by 53,000 in construction, the latest indication that this part of the economy has begun to recover from the interest rate hike induced slump seen last year. In the prior month, the ADP report showed construction shrinking by 16,000 jobs.
Jobs in mining and natural resources grew by 47,000, topping last month 25,0000.
Manufacturing, which has been in a slump for several months, saw payrolls shrink by 30,000. In the prior month, however, payrolls were up by 43,000 and in January they rose by 23,000.
Pay growth decelerated for both job stayers and job changers but remains far above levels considered consistent with the Federal Reserve’s two percent inflation target. For job stayers, year-over-year gains fell to 6.9 percent from 7.2 percent in February. Pay growth for job changers was 14.2 percent, down from 14.4 percent.