ADP’s private payroll in March 2021 is fastest since September

Personal payrolls grew at the fastest pace since September 2020 in March, as expectations of a strong economic recovery coupled with aggressive vaccination rates forced companies to shut down, according to a report by payroll firm ADP on Wednesday.

Companies added 517,000 workers over the month, up from 176,000 in February but just below the Dow Jones estimate of 525,000, as well as some fairly bullish calls for a non-agricultural farm number. The February total has been revised upwards significantly from the 117,000 originally reported.

Though a little below expectations, the March total was the biggest hiring surge since September 821,000.

Importantly, the biggest job gains were in the leisure and hospitality sector, which has been hardest hit due to the government shutdowns related to the Covid-19 pandemic. The sector added 169,000 new workers, part of an overall 437,000 increase in service-related jobs.

Hotels, restaurants, bars and the like have “the greatest opportunity to improve as the economy begins to reopen and the vaccine becomes more widely available,” said Nela Richardson, chief economist at ADP, who compiled the report with Moody’s Analytics.

“We continue to monitor the sectors hardest hit, but the foundations are being laid for a further increase in the monthly hiring pace over the coming months,” added Richardson.

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

Producers of goods also saw strong growth over the month: manufacturing added 49,000 and construction added 32,000 new employees.

From the viewpoint of size, the setting was made uniform.

Companies with 50 to 499 employees led with 188,000 new additions, while small businesses added 174,000 and large companies added 155,000.

The ADP balance sheet precedes Friday’s non-farm payroll report, which is expected to see an increase of 675,000 from February’s 379,000. According to estimates by Dow Jones, the unemployment rate is expected to fall from 6.2% to 6%.