The private sector added more jobs than expected in March, underscoring a U.S. labor market that remains resilient but increasingly cautious as economic uncertainty deepens following the outbreak of war with Iran.

Private employers added 62,000 jobs to their collective payrolls last month, according to payroll processing firm ADP, with smaller companies driving the gains for the second consecutive month. Economists surveyed by Reuters had projected private employment rising by 40,000 positions.

Companies with fewer than 20 employees added 112,000 jobs, while companies with between 20 and 50 employees shed 27,000. Those with 50 to 249 employees lost 26,000 positions.

Job gains were weighted toward the health care, education and construction sectors, which combined for nearly 100,000 additions. Manufacturers shed 11,000 jobs last month, while the trade, transportation and utilities sectors lost 58,000.

The ADP National Employment Report published Wednesday is the first snapshot of March hiring since the start of the Middle East conflict on Feb. 28. Official government estimates of March payroll figures are scheduled to be released by the Bureau of Labor Statistics (BLS) on Friday.

Of note, however, is that ADP’s tally of private sector hiring in February — revised higher in Wednesday’s report from 62,000 to 66,000 gains — contrasts sharply with previously reported government estimates of 86,000 private sector job losses in February, which amounted to an unexpected pullback.

“Overall hiring is steady, but job growth continues to favor certain industries,” said Nela Richardson, chief economist at ADP, describing the March totals as “solid performance” in a statement accompanying the data. She highlighted outsized wage gains for job changers, who pocketed a 6.6% median increase in annual pay compared to a 4.5% bump for job stayers.

In a healthier labor market, that differential would underscore greater leverage for employees to ask for pay raises, or else take their talents elsewhere. Employees may still be asking for raises, but fewer are ultimately choosing to test the job market’s open waters as employers broadly remain cautious around hiring.

Amid prolonged weakness in job creation, an ongoing cost-of-living crisis and rising anxieties about the impact of AI-fueled labor disruptions, employees are holding fast to the jobs they currently have at higher rates.

Just 181,000 nonfarm jobs were added in 2025, according to the BLS, the weakest year of job gains since 2003, excluding the recessionary years of 2008, 2009 and 2020.

Wednesday’s ADP report comes on the heels of government data published Tuesday showing voluntary job separations in the private sector slid by a seasonally adjusted 5.3% in February, plummeting 24.5% on a non-seasonally adjusted basis. Meanwhile, private sector hiring plunged 10% in February, on the eve of the Middle East conflict, now in its fifth week.

Such labor market anxieties underpin divided outlooks among Federal Reserve officials who held benchmark interest rates unchanged when they last met in the middle of March, pending further developments of the war.

“Given the data on the eve of the Iran conflict, people are very confused and uncertain,” explained Yelena Shulyatyeva, senior U.S. economist for The Conference Board, during an interview with Bloomberg Surveillance on Wednesday morning.

The nonprofit research group reported Tuesday that consumers’ outlooks on economic conditions steadied in the first month of the war, improving slightly while inflation expectations surged and hopes for the stock market tumbled.

On the employment front, consumers’ views of the labor market were essentially even from February, with roughly one-quarter of respondents reporting jobs were “plentiful” and about one-fifth reporting that jobs were “hard to get.”

Asked to predict job prospects come September, consumers showed greater pessimism, however. Only 15.4% of surveyed consumers thought more jobs would be available six months from now, down from 16% in February, while 27.9% actively anticipate fewer job openings, an increase from 26.2%.

“I think we’re going to see a significant hit to consumer spending going into this spring and the early summer,” added Shulyatyeva, detailing the “demand destruction” that higher grocery and gasoline prices exert on the broader U.S. economy, fueled by consumer spending.

Retail sales data published Wednesday morning by the U.S. Census Bureau shows consumer spending expanded 0.6% over the month of February on a seasonally adjusted basis, the largest increase since last July. That beat consensus economist expectations of 0.5% and reversed January’s 0.1% decline.

Excluding automobiles, gasoline, food services and building materials, so-called “core retail sales” — which translate most directly to the consumer spending component of gross domestic product — increased 0.5% in February after rising 0.2% in January.

But Shulyatyeva believes a drawn out global energy shock makes it “very easy to say” what Fed officials will do to the federal funds rate over their next several meetings: nothing.

“I think we will see a little bit of a demand shock from what is going on with oil prices,” she concluded. “I think we’re already going to see a significant impact on growth.”

Asked during a CBS News interview Tuesday where how sees the impacts of the Iran war progressing economically, JPMorgan CEO Jamie Dimon described the economy as “one big complex beast, and even AI can’t figure it out.”

“Anything that happens is a straw on the camel’s back,” Dimon said. “Maybe one day a straw is going to cause that tipping point and push us to a recession, hopefully not stagflation. The war is a couple straws on the camel’s back. Whether that causes a tipping point, I don’t know.”