The ADP National Employment Report saw US private employment up 155,000 in March, above expectations of a 105,000 increase and above the 84,000 February rate (revised up from 77,000). The beat and improvement over February is a solid signal that labor demand in the private sector remains strong in the face of uncertainty. ADP chief economist echoed this sentiment, saying “Despite policy uncertainty and downbeat consumers, the bottom line is this: The March topline number was a good one for the economy and employers of all sizes, if not necessarily all sectors.” Despite that, the 3-month average fell for the fourth month in a row to 142,000 (from 149,000 previously).

Here are some of the key details of the report:

• The service sector continued to be the leader with 132,000 jobs added in March, while the goods sector added 24,000. The leading industry was professional & business services, adding 57,000 jobs, followed by financial activities, adding 38,000.
• The manufacturing industry was the largest gainer within the goods sector, adding 21,000 jobs in March. This is the largest increase in manufacturing since October 2022 when COVID job losses were being reversed. With this increase in March, the first two full months of Trump’s presidency have produced manufacturing job gains above the 2018-2019 average of 12,500 (the manufacturing industry added 15,000 jobs in February).
• Job gains by firm size were pretty even across the categories. Large firms with 500+ employees added the most at 59,000, but that was followed closely by medium-sized firms adding 43,000 and small firms adding 52,000. It is especially goods news to see that small businesses added jobs in March as there was no small business employment growth in February according to ADP.

The ADP pay growth data provided further evidence that the pressures from elevated wage growth are gradually easing.

• The key job changers annual pay growth measure eased to 6.5% YoY in March, down from 6.8% YoY in February. This is the lowest in over four years. The job stayers annual pay growth measure also fell, down to 4.6% YoY in March from 4.7% YoY in February. This measure has been in the 4.5 to 5.0% range since March 2024.
• While annual rates have decelerated, Q1 2025 saw a slight pickup in sequential wage growth. Specifically, job changer pay growth in Q1 2025 over Q4 2024 was 1.6% QoQ, up from the 1.4% QoQ in Q4 2024 over Q3 2024. Similarly, job stayer pay growth was up 0.7% QoQ in Q1 2025 and only up 0.1% QoQ in Q4 2024.
• As the quit rate declines, we should continue to see job changers’ wage growth moderate, but a strong and stable labor market is likely to keep job stayers’ wage growth at a moderate pace. ADP notes that the gap between the two categories was just 1.9 ppts in March, the lowest since last September and the joint-lowest since records began in 2020.