WASHINGTON: US private employers eased their pace of hiring in March, data from payroll firm ADP showed Wednesday, in a further sign that the economy is cooling after aggressive actions to rein in inflation.
Employers added 145,000 jobs last month, markedly lower than the revised 261,000 figure in February and weaker than analysts expected.
A strong labor market may encourage optimism that the United States can avoid a major recession after a quick succession of interest rate hikes by the central bank, but policymakers have been eyeing higher wages as they can also feed into inflation.
“Our March payroll data is one of several signals that the economy is slowing,” ADP chief economist Nela Richardson said in a statement on Wednesday.
“Employers are pulling back from a year of strong hiring and pay growth, after a three-month plateau, is inching down,” she added.
While sectors like leisure and hospitality continued to see larger gains in employment, other areas such as financial activities and professional services saw declines.
In March, workers’ pay growth decelerated as well, with annual gains slipping to 6.9 percent for those who did not change jobs, according to the recently revamped ADP report which includes wage data.
For workers who changed jobs, pay growth was at 14.2 percent, cooling slightly as well.
The data offers a preview of the government employment report due on Friday, although ADP’s figures do not always align with official numbers.
Overall, data indicates the labor market is “only gradually softening in response to a rapid increase in interest rates,” said Rubeela Farooqi, chief US economist at High Frequency Economics.
But the impact is expected to broaden as monetary policy ripples through the economy, she said.