After seeing roughly 260,000 jobs added in the month of February, private employers saw a sharp decline in March, as only 145,000 jobs were added to the private sector. Although experts were expecting the number to be lower, it is still much lower than they anticipated. It was originally estimated that around 205,000 jobs would be added for private employers in March.
Overview
According to the chief economist at ADP Nela Richardson, the lack of jobs added into the private sector in March is a telltale sign of what the future holds for the economy. “Our March payroll data is one of several signals that the economy is slowing. Employers are pulling back from a year of strong hiring and pay growth, after a three-month plateau, is inching down,” she said in a statement last week.
Reports
Along with the private employment report for the month of March, ADP also released a report that indicates a steady decline in job openings since the month of February. This caused a stir on wall street as many people took these reports as a signal that the Economy is slowing down significantly.
Cooling Labor Market
Bill Adams is the chief economist for Comerica Bank, and he believes these reports are indicators of a labor market that is slowing down. “This is one of the Fed’s conditions for pausing its interest rate hiking campaign, but the Fed also wants to see core inflation slow more,” Adams said. “If next week’s inflation reports come in hotter than expected, the Fed might still hike their policy rate a quarter percentage point at their next decision in May.”
Wrap Up
The Federal Reserve has continued to raise interest rates in order to combat inflation. If jobs keep declining steadily, however, we will have to wait and see what steps the Fed will take in the foreseeable future.