Private payrolls hiring bursts at fastest pace since September on rise in hospitality hiring

KEY POINTS

• Private payrolls rose by 517,000 in March, the fastest pace since September, according to ADP.
• The total was just below the Dow Jones estimate of 525,000 but well above February’s 176,000.
• Hospitality led the way, with the battered sector adding 169,000 new workers.

Waiter Boris Macquin serves customers behind plexiglass outside at Figaro Bistro on the first day Los Angeles County allows indoor seating since the coronavirus pandemic on March 15, 2021 in Los Angeles, California.

Gina Ferazzi | Los Angeles Times | Getty Images

Private payrolls in March expanded at the fastest pace since September as anticipation of a strong economic rebound coupled with aggressive vaccination rates pushed companies to hire, according to a report Wednesday from payroll processing firm ADP.

Companies added 517,000 workers for the month, a healthy spike from the 176,000 in February though just below the 525,000 Dow Jones estimate as well as some highly optimistic calls for the government's nonfarm payrolls count. The February total was revised sharply higher from the originally reported 117,000.

Even though it was a bit below expectations, the March total represented the biggest hiring burst since September's 821,000.

Importantly, the strongest job gains came from the leisure and hospitality sector, which took the biggest hit due to the government-imposed shutdowns associated with the Covid-19 pandemic. The sector added 169,000 new workers, part of a 437,000 increase overall in services-related jobs.

Hotels, restaurants, bars and the like have "the most opportunity to improve as the economy continues to gradually reopen and the vaccine is made more widely available," said Nela Richardson, chief economist at ADP, which compiles the report with Moody's Analytics.

"We are continuing to keep a close watch on the hardest hit sectors, but the groundwork is being laid for a further boost in the monthly pace of hiring in the months ahead."

Trade, transportation and utilities added 92,000 to the total, while professional and business services increased by 83,000 and education and health services contributed 68,000.

Goods producers also showed strong growth in the month, with manufacturing adding 49,000 and construction gaining 32,000 new hires.

From a size standpoint, the run of hiring saw an even split.

Firms with 50 to 499 employees led with 188,000 additions, while small companies rose by 174,000 and large firms contributed 155,000 to the total.

The ADP tally comes ahead of Friday's nonfarm payrolls report, which is expected to show an increase of 675,000 from February's 379,000. The unemployment rate is projected to fall to 6% from 6.2%, according to Dow Jones estimates.