Private-sector employment
continued at a torrid pace in March, according to data released Wednesday
morning, registering the second-strongest reading in more than two years.
Employers added 263,000 private
sector jobs last month, up from a revised 245,000 in February, ADP Inc.
reported.
The increase in March exceeded
expectations. Economists polled by Econoday had forecast a March gain of
170,000 jobs compared with an original estimate of 298,000 for February.
President Donald Trump has
claimed credit for the acceleration in the pace of job growth this year, as
businesses look at the possibility of tax cuts, deregulation and infrastructure
spending. Job gains have averaged 252,000 in the first three months of 2017.
“The gains are broad based but
most notable in the goods producing side of the economy including construction,
manufacturing and mining,” said Mark Zandi, chief economist at Moody’s
Analytics, who helps prepare the report.
According to ADP, professional
and business sectors added 57,000 jobs and leisure and hospitality added
55,000. There was another strong month for the construction industry, where
49,000 jobs were added, and the manufacturing sector added 30,000 positions.
Stocks rose on the strong
ADP data but gains evaporated after the Federal Reserve suggested it wants to
start shrinking its $4.5 trillion balance sheet this year.
Economists use ADP’s data to get
a feeling for the U.S. Labor Department’s employment report, which will be
released Friday and covers government jobs in addition to the private sector.
Economists polled by MarketWatch before ADP expected the government’s report to
show nonfarm employment rose by 178,000 jobs last month, compared with a
February gain of 235,000 jobs.
After the data was released,
economists began to raise their estimates of March job growth.
Ted Wieseman, economist at Morgan
Stanley, said he now looks for a 195,000 gain in March nonfarm payrolls instead
of 150,000. And economists at Jefferies boosted their forecast to 185,000 from
145,000.
“Today’s data is making us
scratch our heads once again because we had anticipated some payback following
last month’s spike,” said Ward McCarthy, chief financial economist at
Jefferies.
Other economists said they were
sticking with their forecast of a pullback in job growth in March.
UBS economist Samuel Coffin said
the government data is more sensitive to worsening March weather.
ADP calculates the data by using
its own payrolls information, as well as unspecified other factors.
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