United States private employers added just 77,000 jobs in February, significantly below the 140,000 estimate and down from the upwardly revised 186,000 in January, according to fresh data from ADP.
This marks the slowest job growth since July and adds to concerns over a potential economic slowdown.
ADP also reported that annual pay growth remained at 4.7%, unchanged from the prior month.
Nela Richardson, ADP’s chief economist, attributed the slowdown to policy uncertainty and reduced consumer spending. “Our data, combined with other indicators, suggests a hiring hesitancy among employers as they assess the economic climate ahead,” she said.
Job losses were concentrated in industries sensitive to trade conditions. The trade, transportation, and utilities sector saw a decline of 33,000 positions, while education and health services shed 28,000 jobs.
The information sector also reported a drop of 14,000, amid broader concerns over artificial intelligence-related firms.
On the positive side, leisure and hospitality added 41,000 jobs, while professional and business services gained 27,000.
The financial sector and construction each recorded an increase of 26,000 jobs, while manufacturing rose by 18,000, countering recent signs of hiring weakness in the sector.
Large firms led hiring in February, adding 37,000 jobs, whereas small businesses - those with fewer than 50 employees - saw a decline of 12,000.
The ADP report serves as a preview for the official nonfarm payrolls report, due Friday from the Bureau of Labor Statistics (BLS). While ADP and BLS data often diverge, analysts expect the government’s report to show 160,000 new jobs and an unemployment rate of 4%.
Meanwhile, new orders for U.S.-manufactured goods rebounded 1.7% in January, slightly higher than the 1.6% expected, driven by a surge in aircraft demand. However, business spending on equipment remained subdued, reflecting the lingering impact of past interest rate hikes.
