By Reuters Staff
WASHINGTON (Reuters) – U.S. private employers boosted hiring in March as more Americans got vaccinated against COVID-19, pushing the economy towards a broader reopening, which is expected to unleash a strong wave of pent-up demand in the coming months.
Private payrolls increased by 517,000 jobs last month, the ADP National Employment Report showed on Wednesday. Data for February was revised up to show 176,000 jobs added instead of the initially reported 117,000.
Economists polled by Reuters had forecast private payrolls would increase by 550,000 jobs in March.
The ADP report is jointly developed with Moody’s Analytics.
The report has a very poor track record of predicting the private payrolls count in the government’s more comprehensive, and closely watched employment report because of methodology differences. However, March’s surge in hiring aligns with a recent improvement in labor market conditions.
The number of Americans filing new claims for unemployment benefits has dropped to the lowest level since the start of the COVID-19 pandemic in March 2020. A report on Tuesday showed measure of household employment rebounding by the most in a year in March after three straight monthly decreases.
According to a Reuters survey of economists, nonfarm payrolls likely surged by 650,000 jobs in March after rising by 379,000 in February. The government is due to publish March’s employment report on Friday.
The acceleration in the pace of inoculations and the White House’s massive $1.9 trillion pandemic relief package are underpinning the labor market and overall economy.
But rising new infections could spoil the party. New cases of COVID-19 in the United States rose 9% to more than 431,000 last week, the first time since January that cases have increased for two weeks in a row, according to a Reuters analysis of state and county data.
Still, economists are hopeful that the labor market has turned the corner after shedding jobs in December. The relief package passed this month is sending additional $1,400 checks to qualified households and extending the government safety net for the unemployed through Sept. 6.
That is expected to drive consumer spending beginning in March. In addition, Americans have amassed about $1.9 trillion in excess savings, which economists expect will fuel consumer spending when the economy fully re-opens this year and well into 2021, and spur demand for workers.
Atlanta Federal Reserve bank president Raphael Bostic said on Tuesday, “a million jobs a month could become the standard through the summer.”
Moody’s Analytics estimates job growth could average 414,000 per month this year and 360,000 in 2021, which would see payrolls returning to their pre-pandemic peak by the end of 2022. Employment is 9.5 million jobs below its peak in February 2020.
Reporting By Lucia Mutikani; Editing by Chizu Nomiyama
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