ADP found that declining energy prices, the strong dollar and winter weather contributed to slower growth in the U.S. labor market in the first quarter of the year.

The ADP Workforce Vitality Report indicated that the decline in energy prices in particular had an impact on growth in the South, which posted 3.3 percent growth during the past four quarters compared to 5.7 percent in the four quarters of 2014. The West led the nation in terms of growth among regions of the country, with 5.9 percent growth in the past four quarters.

Job growth and wages continue to vary across industry. The construction sector saw the strongest growth over the past year at 9.5 percent, which could be attributed to strong employment growth and an increase in wages. The weakest growth was in the manufacturing sector (1.9 percent).

Overall, women experienced stronger growth than men (4.2 percent vs. 3.3 percent), as both employment and wages advanced more quickly for women than men. Turnover rates continue to remain high with 23 percent or workers switching jobs. Among Millennials, the rate increased to 50.5 percent during Q1.

“Overall we continue to see an overall upward trend compared to last quarter,” said Ahu Yildirmaz, vice president and head of the ADP Research Institute, during a conference call on Wednesday. “It shows the headwinds that we are facing in the economy.”

She noted that the best growth in terms of both employment and wages came in the construction industry. There was also relatively strong growth in the leisure and hospitality industry and the finance sector. Trade and manufacturing, on the other, hand did not perform as well. The manufacturing sector had relatively good numbers for jobs, but wage growth in that sector was relatively weak.

ADP also saw 4.9 percent growth in the first quarter in professional and business services, which include accounting and tax services along with other services, but wages only grew 0.7 percent. “If you look at the wages, the wage increase in both professional and business services is below the national average,” said Yildrimaz. “Net employment is very steady.” However, there has not been much acceleration in the growth of professional services.

Yildrimaz noted large companies have experienced more of an impact more from the headwinds in the economy in the first quarter. Early in the recovery, the large companies performed well, but the equation has changed in the first quarter as small companies have been the main drivers of job and wage growth.
The data is showing relatively better numbers for Millennials in the first quarter compared to the fourth quarter of last year. “All age groups were impacted by the overall slowdown in the economy, but relatively younger age groups continued to perform better,” said Yildirmaz.


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