Private sector job growth improved during February though growth was slightly less than expected, payrolls processing firm ADP reported Wednesday.
Companies added 140,000 positions for the month, an increase from the upwardly revised 111,000 in January but a bit below the Dow Jones estimate for 150,000.
Job gains came across multiple areas, led by leisure and hospitality with 41,000 and construction, which added 28,000 positions. Other industries showing solid gains included trade, transportation and utilities (24,000), finance (17,000), and the other services category (14,000).
Of the total, 110,000 came from the services sector while goods producers added 30,000. Growth was concentrated among larger companies, as establishments with fewer than 50 employees contributed just 13,000 to the total.
Along with the job growth, annual pay increased 5.1% for those staying in their jobs, which ADP said was the smallest rise since August 2021, a potential indication that inflation pressures are receding.
The report comes with the labor market getting added attention for signals of whether U.S. economic growth will stall this year after gross domestic product posted a solid 2.5% annualized gain in 2023.
“Job gains remain solid. Pay gains are trending lower but are still above inflation,” said ADP’s chief economist, Nela Richardson. “In short, the labor market is dynamic, but doesn’t tip the scales in terms of a Fed rate decision this year.”
ADP’s report precedes the Labor Department’s official nonfarm payrolls release, which is scheduled for Friday. In recent months, ADP has consistently undershot the closely watched report from the Bureau of Labor Statistics, which showed an increase of 353,000 in January, more than triple the ADP estimate.
Economists surveyed by Dow Jones are expecting Friday’s report to show a rise of 198,000.
Don’t miss these stories from CNBC PRO:
- Instead of chasing Nvidia, investor buys these misunderstood, cheap growth stocks for big returns
- Why Warren Buffett thinks the power of compound interest is the key to his success
- Forget cash — it’s time to move into fixed income, Franklin Templeton strategist says
- Dan Niles reveals why he prefers the ‘Fantastic Four’ and when the ‘AI bubble’ might pop
- Investors should tread carefully in March after bitcoin’s explosive rally to $60,000
