United States private sector hiring rose more than forecast in February, though gains were driven almost entirely by education and health services.
Companies added 63,000 jobs, per payroll software company ADP’s National Employment Report. This is higher than the Dow Jones consensus estimate of 48,000, and well above the downwardly-revised 11,000 seen in January.
“We've seen an increase in hiring and pay gains remain solid, especially for job-stayers," said ADP chief economist Nela Richardson.
"But with hiring concentrated in only a few sectors, our data shows no widespread pay benefit from changing jobs. In fact, the pay premium for switching employers hit a record low in February.”
Education and health services sector jobs surged by 58,000 last month, by far the most of any industry. The Bureau of Labor Statistics’ January nonfarm payrolls report showed 82,000 jobs were added in healthcare, with another 42,000 in other related care work.
Construction saw the second-highest increase at 19,000, followed by the information sector at 11,000.
The professional and business services sector posted the largest job losses at 30,000. Overall, goods-producing industries added 16,000 jobs and service-providing industries added 47,000.
Job losses were concentrated in the Midwest, with its East North Central subregion the only area nationwide to report a decline. The South added the most jobs, led by its West South Central subregion.
Gains were heavily concentrated in businesses with fewer than 20 employees, as these added 58,000 jobs last month. Businesses with 250-499 employees lost the most jobs, at 4,000.
Pay growth for those staying in jobs remained unchanged at 4.5% in February, with financial activities posting the largest increase at 5.2%. Annualised pay growth for workers switching jobs slowed from 6.4% to 6.3%.
February’s nonfarm payrolls report, which also includes government hiring, will be released on Friday (Saturday AEDT). Consensus estimates include an increase of 50,000 jobs and an unchanged unemployment rate of 4.3%.
While the hiring outlook may be improving, inflation has remained stubborn, with January’s wholesale prices rising far more than estimates. Traders project a 97.3% chance the Fed will hold rates steady at its next meeting on 18 March, per CME FedWatch.
