Employment in the private sector rose by 216,000 from January to February on a seasonally adjusted basis, with half the jobs added by small businesses, according to the monthly national employment report from payroll giant ADP.
ADP also slightly ratcheted up its estimated gain in employment from December to January to 173,000 from the 170,000 it originally reported (see ADP Sees Private Sector Add 170,000 Jobs in January).
Of the 216,000 jobs added in February, 108,000 were added in small businesses with less than 50 employees, 88,000 in midsized businesses with between 50 and 499 employees, and 20,000 in large businesses with 500 employees or more.
Among the job gains were 14,000 in the financial services sector. “It’s a substantial rise in a sector that has been substantially shrinking since the recession,” said Joel Prakken, chairman of Macroeconomic Advisers, which compiles the monthly employment report with ADP. “That’s a nice development if it suggests a bottoming out.” While it represents the seventh consecutive month of job gains in the sector, Prakken noted that it’s by far the biggest in that string and appears to be an acceleration of that trend.
The manufacturing industry alone added 21,000 jobs, and the construction industry added 16,000 jobs last month.
The overall goods-producing sector added 46,000 jobs, while the service-providing sector added 170,000.
Within the 108,000 jobs added at small businesses, 18,000 jobs were added in the goods-producing sector and 90,000 in the service sector.
Prakken said he was heartened by the numbers compared to the weaker numbers of several years ago, but he cautioned that millions more jobs would need to be added to bring down the unemployment rate substantially, especially as more of the unemployed return to the workforce and the participation rate in the workforce increases.
The employment figures released Wednesday by ADP were mostly in line with analyst forecasts and had no immediate impact on the stock market. Prakken anticipates that when the U.S. Bureau of Labor Statistics releases the official job numbers on Friday, they will show a gain of approximately 200,000 jobs, as the BLS takes into account the continual shedding of jobs in the public sector, particularly within state and local governments. That too would be in line with the consensus forecasts among analysts.
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