Economic Release
US: ADP Employment Report
Date: April 2, 2025 07:15 AM CT
| Consensus | Consensus Range | Actual | Previous | Revised | |
|---|---|---|---|---|---|
| Private Payrolls - M/M | 120,000 | 60,000 to 125,000 | 155,000 | 77,000 | 84,000 |
Highlights
The ADP national employment report shows private payrolls up 155,000 in March after an upward revision to up 84,000 in February. The March level is above the consensus of up 120,000 in the Econoday survey of forecasters.
Payrolls are up 24,000 in the goods-producing sector in March with increases of 21,000 in manufacturing and 6,000 in construction, and a small dip of 3,000 in natural resources and mining. The increase in manufacturing is something of a surprise given the broad weakness in surveys of the manufacturing sector. Manufacturers may hiring some skilled workers now that the labor supply has improved and there is less competition pushing up wages.
Payrolls among service-providers are up 132,000 in March with gains in all sectors except one. There is a 6,000 decrease in trade, transportation, and utilities is likely due to job losses in retail where a major chain store has closed. The strongest gains in services payrolls are 57,000 in professional and business services and 38,000 in financial activities. These two account for 72 percent of the rise in service sector payrolls.
Payrolls increase for businesses of all sizes. Small firms (1-49 employees) added 52,000 jobs, medium establishments (50-499) added 43,000 jobs, and large establishments (500+) added 59,000 jobs.
The ADP data on pay insights put the median change in annual pay in March at up 4.6 percent for job-stayers after up 4.7 percent in February. The pace of increases for those remaining in their current job has been in a narrow range of 4.6-4.7 percent since September 2024. The March annual increase for job-changers is up 6.5 percent compared to a year ago, and down three-tenths from 6.8 percent in February. It is the lowest increase since up 6.3 percent in February 2021. While this is still a substantial pay hike, the easing in labor market conditions and economic uncertainty is reducing the incentives to switch jobs.
Payrolls are up 24,000 in the goods-producing sector in March with increases of 21,000 in manufacturing and 6,000 in construction, and a small dip of 3,000 in natural resources and mining. The increase in manufacturing is something of a surprise given the broad weakness in surveys of the manufacturing sector. Manufacturers may hiring some skilled workers now that the labor supply has improved and there is less competition pushing up wages.
Payrolls among service-providers are up 132,000 in March with gains in all sectors except one. There is a 6,000 decrease in trade, transportation, and utilities is likely due to job losses in retail where a major chain store has closed. The strongest gains in services payrolls are 57,000 in professional and business services and 38,000 in financial activities. These two account for 72 percent of the rise in service sector payrolls.
Payrolls increase for businesses of all sizes. Small firms (1-49 employees) added 52,000 jobs, medium establishments (50-499) added 43,000 jobs, and large establishments (500+) added 59,000 jobs.
The ADP data on pay insights put the median change in annual pay in March at up 4.6 percent for job-stayers after up 4.7 percent in February. The pace of increases for those remaining in their current job has been in a narrow range of 4.6-4.7 percent since September 2024. The March annual increase for job-changers is up 6.5 percent compared to a year ago, and down three-tenths from 6.8 percent in February. It is the lowest increase since up 6.3 percent in February 2021. While this is still a substantial pay hike, the easing in labor market conditions and economic uncertainty is reducing the incentives to switch jobs.
Market Consensus Before Announcement
Private payrolls are expected up a decent 120,000 in March after rising a sluggish 77,000 in February.
Definition
The national employment report from Automated Data Processing Inc. is computed from ADP payroll data and offers advance indications on the U.S. workforce. ADP's data cover more than 500,000 companies totaling more than 25 million employees. The report is produced by ADP Research Institute in collaboration with Stanford Digital Economy Lab.
Description
Market players have become accustomed to the excitement on employment Friday and realize the rich detail of the monthly employment situation can help set the tone for the entire month. While economists have improved their nonfarm payroll forecasts over the years, it is not unusual to see surprises on employment Friday. To that end, the ADP's national employment report can help improve the payroll forecast by providing information in advance of the employment report.
The employment statistics also provide insight on wage trends, and wage inflation is high on the list of enemies for the Federal Reserve. Fed officials constantly monitor this data watching for even the smallest signs of potential inflationary pressures, even when economic conditions are soggy. If inflation is under control, it is easier for the Fed to maintain a more accommodative monetary policy. If inflation is a problem, the Fed is limited in providing economic stimulus.
By tracking jobs, investors can sense the degree of tightness in the job market. If wage inflation threatens, it's a good bet that interest rates will rise; bond and stock prices will fall. No doubt that the only investors in a good mood will be the ones who watched the employment report and adjusted their portfolios to anticipate these events. In contrast, when job growth is slow or negative, then interest rates are likely to decline - boosting up bond and stock prices in the process.
The employment statistics also provide insight on wage trends, and wage inflation is high on the list of enemies for the Federal Reserve. Fed officials constantly monitor this data watching for even the smallest signs of potential inflationary pressures, even when economic conditions are soggy. If inflation is under control, it is easier for the Fed to maintain a more accommodative monetary policy. If inflation is a problem, the Fed is limited in providing economic stimulus.
By tracking jobs, investors can sense the degree of tightness in the job market. If wage inflation threatens, it's a good bet that interest rates will rise; bond and stock prices will fall. No doubt that the only investors in a good mood will be the ones who watched the employment report and adjusted their portfolios to anticipate these events. In contrast, when job growth is slow or negative, then interest rates are likely to decline - boosting up bond and stock prices in the process.
