Hiring by U.S. companies slowed more than expected in March, pointing to a labor market that is starting to cool in the face of higher interest rates, according to the ADP National Employment Report released Wednesday morning.
Companies added 145,000 jobs last month, missing the 200,000 gain that economists surveyed by Refinitiv predicted. It also marked a major decline from the upwardly revised 261,000 recorded in February.
The report comes as the Federal Reserve wages the most aggressive fight since the 1980s to crush inflation and slow the labor market with a series of rapid interest rate increases. Fed policymakers have made it clear that they anticipate unemployment to climb as a result of higher borrowing costs, which could force consumers and businesses to pull back on spending.
In a potentially welcoming sign for the Fed as it tries to wrangle inflation under control, wages cooled at a faster pace in March for both workers who stayed in their jobs and who left. Annual pay rose 6.9% in March, down from 7.2% in February, according to the report.
“Our March payroll data is one of several signals that the economy is slowing,” said Nela Richardon, 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 data precedes the release of the more closely watched March jobs report on Friday morning, which is expected to show that employers hired 240,000 workers following a gain of 311,000 in February. The unemployment rate is expected to hold steady at 3.6%.
Read the full article here