Private companies added 63,000 jobs in February, January revised to just 11,000 additions, ADP says
Private sector hiring in February showed some improvement, with companies adding 63,000 workers during the month, according to a report from ADP. This figure was better than the downwardly revised 11,000 in January and exceeded the Dow Jones consensus estimate of 48,000.
However, the job creation was largely concentrated in just two sectors. Education and health services added 58,000 jobs, while construction contributed 19,000. Other sectors like professional and business services, manufacturing, and trade, transportation, and utilities saw declines or stagnant growth.
On the wage side, pay grew 4.5% for those staying in their jobs, while wage gains for job switchers decreased to 6.3%. This reduced the incentive for changing jobs to the lowest level since ADP began tracking the metric.
Job creation was mainly seen in businesses with fewer than 50 employees, with small businesses adding 60,000 jobs. Medium-sized firms reported a drop of 7,000 jobs, while big businesses with 500 or more workers added 10,000.
Despite the increase in construction jobs, concerns about stubbornly higher inflation persist, especially with recent events in Iran and the Middle East. Treasury Secretary Scott Bessent expressed optimism about the jobs market, citing a “technology-driven productivity boom” that will benefit the economy.
Federal Reserve officials have shown confidence that the jobs picture is stabilizing, but there are worries about potential inflation spikes due to rising oil prices. Traders are now predicting that the next Fed interest rate cut won’t come until at least July.
The ADP report sets the stage for Friday’s nonfarm payrolls report from the Bureau of Labor Statistics, which is expected to show an increase of 50,000 jobs in February. Economists anticipate the unemployment rate to remain steady at 4.3%.
Overall, while there are signs of improvement in the labor market, concerns about inflation and geopolitical tensions continue to loom large. The job market remains a key indicator of economic health, and all eyes will be on upcoming reports to assess the ongoing trends.
