Private businesses in the US added 155K workers to their payrolls in March 2025, following an upwardly revised 84K in February and surpassing market expectations of 105K. This marks the strongest pace of hiring in three months, suggesting resilience in the labor market despite ongoing economic uncertainties.
US private sector job growth above forecasts
The services sector contributed the bulk of the job gains, adding 132K positions, with professional and business services leading the way (57K), followed by financial activities (38K), leisure and hospitality (17K), education and health services (12K), and information (3K). However, trade, transportation, and utilities saw a decline, shedding 6K jobs, reflecting potential challenges in consumer demand and supply chain adjustments. Meanwhile, the goods-producing sector added 24K jobs, primarily driven by manufacturing (21K) and construction (6K), while natural resources and mining continued to struggle, losing 3K positions.
Annual pay growth continues to moderate
On the wage front, year-over-year pay growth continued to moderate, with job-stayers seeing their earnings increase by 4.6%, down slightly from previous months, while job-changers experienced a 6.5% pay increase. The pay premium for job-changers remained at 1.9 percentage points, matching a series low last observed in September, indicating that wage pressures may be easing as labor market conditions normalize.
ADP economist comment
“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,” said Nela Richardson, Chief Economist at ADP. The latest data suggests that businesses remain cautiously optimistic about hiring, though sectoral disparities persist, with industries like financial services and manufacturing showing strength while trade-related sectors face headwinds. Looking ahead, labor market trends will likely be influenced by ongoing Federal Reserve policy decisions, inflationary pressures, and potential disruptions in global trade.
