Private employers added 517,000 jobs in March, a sign the labor market is shrugging off its winter blues and is poised for a pickup.
The report from payroll firm ADP may give a hint as to what to expect from Friday’s monthly jobs report from the Bureau of Labor Statistics. After adding 379,000 jobs in February, expectations are that nonfarm payrolls expanded by more than 600,000 in March.
The gains in March were broadly based by size of business, with medium businesses employing between 50 and 499 workers seeing the largest increase, followed by small and large establishments.
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The services sector accounted for 437,000 of the 517,000 jobs added, with 169,000 jobs gained in the leisure and hospitality industries. Those two have been the hardest hit by the coronavirus, and the large increases in employment are likely a result of restrictions being loosened and the rapid pace of vaccinations in recent weeks.
“We saw marked improvement in March’s labor market data, reporting the strongest gain since September 2020,” said Nela Richardson, chief economist, ADP. “Job growth in the service sector significantly outpaced its recent monthly average, led with notable increase by the leisure and hospitality industry. This sector has the most opportunity to improve as the economy continues to gradually reopen and the vaccine is made more widely available.”
The report is yet another sign that the U.S. economy is recovering, with many economists saying it will lead the global rebound from the deadly virus. Alejandra Grindal, senior international economist at Ned Davis Research recently raised her estimate for global growth in gross domestic product to 6.1% this year from 5.8% previously.
She based her upgrade on the passage of the American Rescue Plan, which is set to pump $1.9 trillion into the economy.
“The additional stimulus, along with the successful vaccination drive, is the main reason we upgraded our U.S. GDP growth forecast to a range of 6.5% to 7%,” Grindal says. “This growth rate, coupled with the size of the U.S. economy, means the country will likely be the biggest contributor to global growth this year, unseating China, which has held the title for most of the 21st century.”