Companies in the U.S. expanded payrolls in March, showing the labor market is strengthening, according to data from a private report based on payrolls.
Employment increased by 209,000 for the month after a revised 230,000 gain in February, figures from ADP Employer Services showed today. The median estimate in the Bloomberg News survey called for a 206,000 increase.
Faster job growth may lead to the wage gains needed to sustain consumer spending, which accounts for about 70 percent of the world’s largest economy. Businesses added 215,000 jobs in March, and the unemployment rate held at 8.3 percent, economists project a Labor Department report will show in two days.
“Labor market conditions continue to improve at a moderate pace,” Joel Prakken, chairman of Macroeconomic Advisers LLC in St. Louis, which produces the report with ADP, said in a statement. “Employment grew in all major sectors of the economy tracked.”
Estimates in the Bloomberg survey of 38 economists ranged from increases of 170,000 to 250,000.
Stock-index futures held earlier losses after the report. The contract on the Standard & Poor’s 500 contract maturing in June dropped 0.8 percent to 1,397.1 at 8:47 a.m. in New York, depressed by a drop in demand for Spanish bonds and after the Federal Reserve signaled yesterday it may refrain from additional monetary stimulus.
Over the previous six reports, ADP’s initial figure was closest to the Labor Department’s first estimate of private payrolls in October, when it overstated the gain in jobs by 6,000. The estimate was least accurate in December, when it overestimated the employment gain by 113,000. In January, ADP underestimated the figure by 87,000.
Today’s ADP report showed an increase of 45,000 workers in goods-producing industries, which includes manufacturers and construction companies. Employment at factories rose by 23,000.
Service providers added 164,000 workers, ADP said.
Companies employing more than 499 workers expanded their workforces by 22,000 jobs. Medium-sized businesses, with 50 to 499 employees, created 87,000 jobs and small companies increased payrolls by 100,000, ADP said.
“We think improving performance in the U.S. should support economic and labor-market growth,” Carl Camden, president and chief executive officer of the staffing firm Kelly Services Inc. (KELYA), said March 12 during a conference in Scottsdale, Arizona. “We believe the U.S. economy has now reached the level of growth needed to support continuous job creation.”
Total payrolls, which include government workers, probably rose by 201,000 in March, according to the median forecast of economists surveyed by Bloomberg before the Labor Department’s April 6 report.
“A wide range of indicators suggests that the job market has been improving, which is a welcome development indeed,” Federal Reserve Chairman Ben S. Bernanke said last week. “Still, conditions remain far from normal, as shown, for example, by the high level of long-term unemployment and the fact that jobs and hours worked remain well below pre-crisis peaks.”
The ADP report is based on data from about 340,000 businesses employing more than 21 million workers. Macroeconomic Advisers LLC in St. Louis produces the data with ADP.
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