According to a recent Axios Macro article, the private sector payrolls report by ADP, although not a perfect indicator, provides valuable insights into general hiring and pay trends among private firms. As of March, the data suggests a cooling labor market.
ADP's chief economist Nela Richardson told reporters, "The jobs market shifted to a slower gear in March," and added that "hiring demand is now coming a little more into balance with the supply." The statistics revealed by ADP indicate that the private sector added 145,000 jobs last month, with the majority of hiring attributed to the smallest firms, those with fewer than 50 employees.
The article also highlights that wage gains have cooled down, both for employees who remained in their jobs and for those who switched work. On an annual basis, wages for job-stayers increased by 6.9%, the slowest pace in over a year. Prior to the pandemic, wage growth was below 3%, as Richardson mentioned. Meanwhile, pay growth for job-switchers was up by 14.2% year-over-year, a slight decrease from the previous 14.4%.
The main takeaway from ADP's data, as reported by Axios Macro, is that the labor market has become less heated than in recent months. This is consistent with other job figures such as Tuesday's report, which showed a decline in job openings. The government jobs report, which economists expect to reveal the addition of approximately 240,000 jobs in March, will have the final say on the state of the labor market.
Footnotes:
1 Adapted from source: "Axios." Axios, 5 Apr. 2023, www.axios.com/newsletters/axios-macro-cba18d21-c1e7-4ab8-9270-8cde47b33783.html?chunk=1&utm_term=emshare#story1.
2 Photo by Clem Onojeghuo on Unsplash
