Jobs, Jobs, Jobs - Inside the ADP Jobs Report - April 2022
Bottom Line: No nits to really pick in March’s private sector jobs numbers. The news was good just about everywhere. After two months of strong job growth with large companies but net job cuts by small ones – we had growth everywhere this month. The headline number for job growth in the ADP Report for March, at 455,000 private sector jobs added, is the lowest in seven months. Where the jobs were added was the best so far this year. The most important leading indicator in the US economy is small business activity. Most Americans work for small businesses and in healthy economies they account for the largest employment gains. Small businesses still added the fewest jobs during the month but importantly they were back to adding jobs. Here’s the breakout...
Job changes based on company size.
- Small businesses: +90,000
- Midsized: +188,000
- Large: +177,000
While ideally, we’d like to see small businesses adding jobs at a larger clip – it’s at least encouraging to see mid-sized companies out-hiring the largest ones. And based on that change this month as well, it’s altogether possible and probably likely, that small companies only didn’t hire more because they struggled to find enough people to fill the jobs, they have available. That's not great news for small businesses but it is generally for the economy. If not for a 40-year high for inflation the economy would be super strong right now. The question is how long we’re all able to maintain in this cost prohibitive environment. But that’s for a different day.
These were the top industries for job gains:
- #1: Leisure and Hospitality
- #2 Education & Health
- #3: Professional and business services
The news here was good as well. Jobs were added across all sectors and industries in March except for information which was flat. Last month I said this: If Americans have hit the wall from a consumer standpoint – perhaps international markets and foreign demand for American products and services can fill the gap to avoid a recession. With oil now over $110 per barrel, March is set to be an even bigger test of how much we can withstand as consumers to maintain a growing economy. Looks like we passed that test. But oil is still near $110 per barrel. Gas is still well over $4 per gallon and March’s inflation report, once we get it, will almost certainly show consumer inflation over 9% (I’ve had it pegged at 9.5% for nearly two months). So, the test continues...