Private Sector Adds 117,000 Jobs, Fewer Than Expected
U.S. companies added fewer jobs than economists had expected in February, reinforcing the labor market’s struggle to emerge from its pandemic doldrums.
ADP’s national employment report—a measure of private-sector employment often viewed as a potential predictor of the federal government’s monthly report on jobs—showed private payrolls increased by 117,000 in February on a seasonally-adjusted basis, the payroll company said Wednesday. Economists had expected 174,000 jobs to be added, according to the median estimate cited by Moody's Analytics.
The 117,000-job increase marks one of the worst months for job creation since the labor market took a huge initial hit from the COVID-19 outbreak. Last summer, monthly job growth was as much as seven times higher. In January, 195,000 jobs were added.
“The labor market continues to post a sluggish recovery across the board,” said Nela Richardson, ADP’s chief economist, in a statement.
Even as expectations for the future economy become increasingly optimistic, the private sector remains 9.6 million jobs shy of where it was pre-pandemic, according to ADP’s numbers. The number of people initiating claims for unemployment insurance each week is still about three times higher than it was before the pandemic, and Federal Reserve Chairman Jerome Powell has said the country’s reported unemployment rate of 6.3% is actually closer to 10%.
The net gain was because of additions in service sectors that have been hit harder by the pandemic restrictions on business. The economy added 131,000 service sector jobs, according to ADP, while losing 14,000 goods-producing jobs.
The more widely cited monthly jobs report from the Bureau of Labor Statistics is due Friday. Estimates vary widely, with Moody’s forecasting a gain of 280,000 jobs but citing a median expectation among economists of 177,500.