US companies added far fewer jobs than forecast in February, ADP says
Olivier Douliery/AFP/Getty Images
- The US added 117,000 private payrolls in January, according to ADP's monthly employment report.
- The reading lands well below the 200,000 additions expected by economists.
- ADP's report comes two days before the Bureau of Labor Statistics publishes nonfarm payrolls data.
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Employment in the US private sector grew last month as falling COVID-19 case counts and continued vaccination lifted economic activity.
Private payrolls rose by 117,000 in February, according to ADP's monthly employment report. The median estimate from economists surveyed by Bloomberg was an increase of 200,000 payrolls. The reading marks a second straight monthly gain after a revised 195,000 jump in January.
Payroll growth has steadily improved after unexpectedly declining in December. Soaring COVID-19 cases and strict economic lockdowns through the winter halted the labor market's recovery, but an improving backdrop opens the door for fresh gains in the spring.
The education and trade and transportation sectors enjoyed the largest pickup in payrolls, according to ADP. Businesses in the construction and manufacturing sectors saw declines in February.
Small businesses added 32,000 payrolls through the month, while large businesses took on 28,000 payrolls. Medium businesses - those with 50 to 499 employees - made up the bulk of the February gains with 57,000 additions.
ADP's report comes ahead of the Bureau of Labor Statistics' own Friday release. The government's data officially sets the national unemployment rate and gives a more detailed view as to how hiring picked up or slowed down over a month.
While ADP's report can differ dramatically from the BLS data, Wednesday's reading suggests encouraging trends seen in recent months are finally lifting the labor market. The US reported 54,349 new COVID-19 cases on the last day of February, down significantly from levels seen one month prior. Hospitalizations also swiftly declined through the month, according to The COVID Tracking Project.
Democrats aim to further juice the rebound in March. The House passed a $1.9 trillion stimulus package on Saturday, setting the measure up for a Senate vote before expanded unemployment benefits lapse in mid-March. The proposal, backed by President Joe Biden, includes $1,400 direct payments, a $400 supplement to federal unemployment benefits, and funding for state and local governments.
Stronger-than-expected January retail sales signal the $900 billion stimulus package passed in December lifted consumer spending. A similar effect from the $1.9 trillion package could further boost demand at struggling retailers and incentivize additional hiring.
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