The ADP national employment report shows 184,000 new hires in March after an upwardly revised 155,000 in February. The increase in March was above the consensus of up 150,000 in the Econoday survey of forecasters. All industry categories except one recorded an increase in March. ADP said the March gain was the largest since July 2023 when payrolls rose 307,000. Overall, private businesses continue to bring on new employees in a solid labor market in a period of modest expansion.

Among goods-producers, there were 42,000 new jobs in March. Construction added 33,000 jobs, manufacturing 1,000, and natural resources/mining 8,000. Service-providers' payrolls increased 142,000 in March on broad-based gains. An increase of 63,000 in leisure/hospitality accounted for a little under half of the total, followed by trade/transportation/utilities with 29,000. The only decline was 8,000 in professional/business services.

By establishment size, payrolls were up 16,000 for small businesses (1-49 employees), 93,000 for medium-sized businesses (50-499 employees), and 87,000 for large businesses (500+ employees).

Workers continue to see an incentive to change jobs in terms of pay. In March, the median year-over-year increase in pay rose 5.1 percent. However, the increase for job-changers was 10.0 percent, a pickup from the up 7.6 percent in February. Competition for workers with the right skills and/or experience remains fierce.

Forecasters see ADP's March employment number at 150,000. This would compare with February growth in private payrolls reported by the Bureau of Labor Statistics of 223,000. ADP's number for February was 140,000.

The national employment report from Automated Data Processing Inc. is computed from ADP payroll data and offers advance indications on the U.S. workforce. ADP's data cover more than 500,000 companies totaling more than 25 million employees. The report is produced by ADP Research Institute in collaboration with Stanford Digital Economy Lab.

Market players have become accustomed to the excitement on employment Friday and realize the rich detail of the monthly employment situation can help set the tone for the entire month. While economists have improved their nonfarm payroll forecasts over the years, it is not unusual to see surprises on employment Friday. To that end, the ADP's national employment report can help improve the payroll forecast by providing information in advance of the employment report.

The employment statistics also provide insight on wage trends, and wage inflation is high on the list of enemies for the Federal Reserve. Fed officials constantly monitor this data watching for even the smallest signs of potential inflationary pressures, even when economic conditions are soggy. If inflation is under control, it is easier for the Fed to maintain a more accommodative monetary policy. If inflation is a problem, the Fed is limited in providing economic stimulus.

By tracking jobs, investors can sense the degree of tightness in the job market. If wage inflation threatens, it's a good bet that interest rates will rise; bond and stock prices will fall. No doubt that the only investors in a good mood will be the ones who watched the employment report and adjusted their portfolios to anticipate these events. In contrast, when job growth is slow or negative, then interest rates are likely to decline - boosting up bond and stock prices in the process.