The U.S. economy added 455,000 private sector jobs last month as service-focused companies ramped-up hiring in the wake of the Covid pandemic.
The U.S. economy added modestly more-than-expected private sector jobs last month, data indicated Wednesday, as hiring in the hospitality and leisure sector accelerated in the wake of Covid restrictions on business and travel.
Payroll processing group ADP said in its National Employment Report, which it compiles with Moody’s Analytics, that private sector jobs grew by 455,000 in November, just ahead of the Street consensus forecast of a 450,000 total, with the bulk of the gains from medium and large-sized business in the leisure and hospitality sector.
The Bureau of Labor Statistics will publish its official nonfarm payroll report Friday, with economists looking for a headline total that represents around 490,000 new jobs and a headline unemployment rate of 3.8%.
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“Job growth was broad-based across sectors in March, contributing to the nearly 1.5 million jobs added for the first quarter in 2022,” said ADP’s chief economist Nela Richardson. “Businesses are hiring, specifically among the service providers which had the most ground to make up due to early pandemic losses. However, a tight labor supply remains an obstacle for continued growth in consumer-facing industries.”
U.S. equity futures were modestly firmer following the data release, with contracts tied to the Dow Jones Industrial Average indicating an opening bell decline of 120 points and those linked to the S&P 500 priced for an 18 point decline from last night’s close.
Benchmark 10-year Treasury bond yields, meanwhile, ticked modestly lower, to 2.40%, while the dollar index fell 0.44% against a basket of its global peers to trade at 97.966.
The Federal Reserve will publish it preferred inflation gauge, the PCE Price Index, on Thursday with analyst looking for a bump higher in incomes, a pullback in real spending and another nudge higher in overall inflation pressures.
Friday’s non-farm payroll report will also provide firm clues as to both the pace of growth in the labor market and any acceleration in wages, which could give the Fed more fuel to its argument that higher rates are needed to tame the fastest consumer price inflation in forty years.
That’s even more likely now that we know that more than 11.2 million positions in the job market remained unfilled last month, according to data from the February Job Openings and Labor Turnover Survey published Tuesday, a figure that can only suggest companies need to pay higher salaries to tempt people back into the workforce.
“Openings are now stable, close to their all-time highs, and massively elevated even when compared to the peak of the previous economic cycle,” said Ian Shepherdson of Pantheon Macroeconomics. “By contrast, the NFIB survey’s measure of jobs-hard-to-fill at small businesses has dipped in recent months, though it too remains very high by historical standards.”
“The labor market remains tight, but is no longer tightening,” he added.
