That was slightly better than economists had expected, but fell short of the more highly revised February report. It was also the weakest monthly private sector job gains since August. This relative slowdown is to be expected as the labor market moves towards full employment.
However, there is still a lot to do on the American job market.
Job openings are still near record highs and many workers are quitting their jobs for better opportunities. Last month, US employers had 11.3 million vacancies to fill, while new hires stood at 6.7 million. In other words, the historically strong number of new hires pales in comparison to the millions of jobs available.
“So we’re looking for those numbers to get closer together,” Nela Richardson, chief economist at the ADP, told reporters on a call after the report’s release.
Federal Reserve Chairman Jerome Powell called the phenomenon an unhealthy tightening in the labor market, Richardson added. And she’s not convinced it will resolve itself by summer.
March job gains were consistent across company sizes, although larger companies led the gains.
“This is a highly competitive environment for talent. We still have a reduced overall workforce. Bigger firms with bigger budgets have a little easier time penetrating the local market,” Richardson said.
Job additions were also sustained in most sectors. Information technology remained the only sector that neither increased nor decreased this month. Leisure and hospitality again led job growth, adding 161,000 jobs.
The number of private sector jobs comes ahead of the government’s official employment assessment due on Friday. The two reports are uncorrelated. Economists polled by Refinitiv are forecasting a 490,000 job gain in the Bureau of Labor Statistics’ monthly jobs report for March, which would mean a slowdown from February’s surprisingly strong number. However, the pandemic has messed up forecasters’ models. This makes it difficult to predict the course of recovery and leads to frequent revisions of the official data.