A worker prepares a 155mm artillery shell at the Scranton Army Ammunition Plant in Scranton, Pennsylvania, U.S., February 16, 2023.
Brendan McDermid | Reuters
Companies added jobs at a brisk pace in February as the U.S. labor market kept humming, payroll services firm ADP reported Wednesday.
Private payrolls increased by 242,000 for the month, ahead of the Dow Jones estimate for 205,000 and well above the upwardly revised 119,000 jobs gain, from 106,000, in January.
Wage growth decelerated slightly, with those remaining in their jobs seeing a 7.2% annual increase, down 0.1 percentage point from a month ago. Job changers saw growth of 14.3%, compared with 14.9% in January.
The report comes with Federal Reserve officials watching jobs data closely for clues on where inflation is headed. Remarks Tuesday from Fed Chairman Jerome Powell, who called the jobs market “extremely tight,” triggered a sell-off on Wall Street amid expectations that the central bank could accelerate the pace of its interest rate increases.
“There is a tradeoff in the labor market right now,” said ADP’s chief economist, Nela Richardson. “We’re seeing robust hiring, which is good for the economy and workers, but pay growth is still quite elevated. The modest slowdown in pay increases, on its own, is unlikely to drive down inflation rapidly in the near-term.”
By sector, leisure and hospitality led job growth with 83,000 additions. Financial activities added 62,000 while manufacturing showed a robust 43,000 gain as the industry benefited from a mild winter.
Other areas showing increases included education and health services (35,000), the “other services” category (34,000), and natural resources and mining (25,000). Professional and business services lost 36,000 jobs, while construction was down 16,000.
All of the job additions came from companies employing 50 or more workers. Small businesses saw a net loss of 61,000, most of which came at establishments employing fewer than 20 people.
The ADP report…
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