Preview: Due April 2 - U.S. March ADP Employment - February weakness may prove erratic
We expect a 125k increase in March’s ADP estimate for private sector employment growth, stronger than February’s weak 77k that significantly underperformed the non-farm payroll, but still below the pre-February trend. Initial claims suggest the labor market remains healthy.
A 125k March increase would be weaker than the 165k increase we expect for March’s non-farm payroll, both in its private sector number and overall. A 40k underperformance of the payroll would be the smallest difference without regard to sign between the two series since July 2024, though would be a second straight underperformance.
We expect the ADP detail to show goods slowing from an above trend 34k February increase but services accelerating from a very weak February increase of 36k.
One sector worth watching particularly closely in education and health, which fell by 28k in February’s AFP report but has tended to be the strongest component in recent non-farm payrolls.
