Hiring Holds Steady in March – But It’s a One-Industry Story

CNBC, FOX Business, Market Watch, Bloomberg, and the Hill contributed to this report.

The US job market is still adding positions. Just not everywhere.

Private companies hired 62,000 workers in March, according to ADP – a bit better than expected and only slightly below February’s revised total. Economists had been bracing for something closer to 39,000.

So, on paper, it’s a decent number. Dig a little deeper, and the picture gets more uneven.

Health care is doing most of the heavy lifting. Again.

Education and health services accounted for 58,000 of those new jobs – nearly the entire gain – while construction chipped in another solid boost. Together, those sectors are carrying the broader labor market, while other industries struggle to keep pace.

“Health care is transforming the labor market,” ADP chief economist Nela Richardson said, pointing to two straight months where the sector has dominated hiring.

Elsewhere, the story flips. Trade, transportation and utilities cut 58,000 jobs. Manufacturing shed another 11,000. That’s a sizable drag, especially for sectors tied more closely to goods and global demand.

Some smaller pockets showed growth – information services, mining, leisure – but nothing on the scale of health care.

There was one unusual twist: hiring was almost evenly split between goods-producing and service sectors. That doesn’t happen often in an economy that typically leans heavily on services.

Another shift is happening under the surface. Small businesses are back in the driver’s seat.

Companies with fewer than 50 employees added 85,000 jobs. Meanwhile, medium-sized firms cut 20,000 roles, and large companies trimmed 4,000. It’s the second straight month where smaller firms led hiring, possibly as they try to catch up – or as workers pick up extra jobs to keep up with rising costs.

Pay is still growing, which helps explain why hiring hasn’t completely stalled. Workers who stayed put saw wages rise 4.5% from a year ago. Those switching jobs did even better, with gains climbing to 6.6%.

Still, the broader trend hasn’t changed much. Hiring is steady, but narrow. A few sectors are expanding, others are pulling back, and the overall pace isn’t exactly booming.

Now comes the bigger test.

The official jobs report from the Bureau of Labor Statistics is just around the corner, and expectations are modest. Economists are looking for a small gain and an unemployment rate holding near 4.4%.

For now, the labor market is hanging in there – uneven, but not cracking.