ADP reported that the private sector added 63,000 jobs in February, surpassing economists’ expectations of a 50,000 job gain [1]. The previous month's payrolls figure was revised downward to a gain of 11,000 from the initially reported 22,000 [1]. According to Nela Richardson, ADP's chief economist, hiring and pay gains remain solid, particularly for employees who stay in their current roles. However, hiring was concentrated in a few sectors, and the pay premium for switching employers reached a record low in February [1].
Education and health services led job creation with 58,000 new positions, followed by construction with 19,000, information with 11,000, other services with 6,000, financial activities with 2,000, natural resources and mining with 2,000, and leisure and hospitality with 1,000 jobs added [1]. In contrast, professional and business services lost 30,000 jobs, manufacturing lost 5,000, and trade, transportation, and utilities lost 1,000 positions [1].
Large businesses (500 or more employees) added 10,000 jobs, while mid-sized businesses (50 to 499 employees) lost 7,000 workers. Small businesses (fewer than 50 employees) contributed significantly, adding 60,000 jobs [1]. Wage growth was largely unchanged from the previous month, with job-stayers seeing a 4.5% year-over-year pay increase. Pay gains for job-switchers declined slightly to 6.3% from 6.4% in January [1].
The data suggests that while overall hiring exceeded expectations, gains were unevenly distributed across sectors and business sizes. The record low pay premium for job-switchers may indicate limited wage competition, and the downward revision of January's payrolls highlights ongoing volatility in employment trends [1].
CONCLUSION
ADP's February report showed stronger-than-expected job gains in the private sector, driven mainly by small businesses and select industries. However, losses in professional and business services and a record low pay premium for job-switchers point to uneven labor market improvements. The market takeaway is cautiously positive, with solid hiring but lingering sectoral weaknesses.