Private employers added only 145,000 new jobs in March, well below expectations and a possible sign that the economy may be slowing after months of strong economic growth, according to ADP, which tracks economic indicators.
The monthly ADP National Employment Report found consumer demand dropped as the cost of borrowing increased last month. The Federal Reserve has consistently raised interest rates over the past year to try to get high inflation under control, but some economic experts have warned that those actions could cause an economic downturn.
“Our March payroll data is one of several signals that the economy is slowing,” ADP Chief Economist Nela Richardson said in a release. “Employers are pulling back from a year of strong hiring and pay growth, after a three-month plateau, is inching down.”
CNBC reported that the 145,000 jobs added was much lower than the Dow Jones estimate of 210,000 and the upwardly revised 261,000 from February.
Small businesses experienced the best month; those with one to 19 employees added 38,000 new jobs and those with 20 to 49 employees added 63,000 new jobs.
Businesses with 250 to 499 employees was the only business size that experienced a drop, losing 42,000 jobs.
The leisure and hospitality industry saw the largest growth with 98,000 new jobs, while the financial activities industry was hit the hardest with 51,000 positions lost.
The South was the only region in the country that lost jobs, with 228,000 fewer last month.
The report also found that those who changed their jobs saw a 14.2 percent pay increase, down from 14.4 percent in February, while those who stayed in their jobs saw their pay increase 6.9 percent, down from 7.2 percent.
The Fed raised interest rates by 0.25 percentage points last month to a baseline range of 4.75 percent to 5 percent. Fed Chair Jerome Powell has indicated a willingness to raise rates as necessary to get inflation back to the target of 2 percent, even if it causes a downturn.
The Fed’s projected unemployment rate for this year was set at 4.5 percent when it raised rates last month, still considerably higher than the current 3.6 percent unemployment rate.