U.S. businesses added over 260,000 employees last month, marking the largest employment increase seen since December 2014, Reuters reported. This data, which comes from the ADP National Employment Report, indicates a tightening labor market and aligns with expectations for the Federal Reserve to increase interest rates two more times in 2017.
"The labor market is tight and it will get tighter," said Mark Zandi, chief economist at Moody's Analytics - the firm that collaborated with ADP to develop the report.
According to Reuters, the figure set by ADP far exceeds the median increase forecast by economists, which was put at 187,000. The unemployment rate is expected to remain steady at 4.7 percent.
"The labor shortage might be exacerbated by immigration issues," Zandi added.
The source also noted that domestic labor growth, holding steady at 3 percent to 4 percent annually, could be thwarted if immigration were to be cut in half. If stricter immigration policies are enforced, it may decrease labor supply and increase talent acquisition competition.
In February, private payroll gains were revised from 298,000 down to 245,000. According to Reuters, economists are predicting private payroll employment in the U.S. to have increased by 175,000 jobs last month, marking 227,000 fewer positions than in February.
"The U.S. labor market finished the first quarter on a strong note," ADP Vice President Ahu Yildirmaz said in a press release. "Consumer-dependent industries including healthcare, leisure and hospitality, and trade had strong growth during the month."
This data comes just before the U.S. Labor Department Employee Situation Report, which will be released on Friday.