Employment in the private sector rose by 140,000 in February, while annual pay climbed 5.1% year over year, payroll processor ADP reported Wednesday.
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"We saw a pickup in professional business services that is consistent with the job openings that were very strong in December," said ADP chief economist Nela Richardson during a conference call Wednesday with reporters.
Small businesses added 13,000 jobs in February, including 11,000 in businesses with between one and 19 employees, and 2,000 in companies with between 20 and 49 employees. Medium-sized establishments added 69,000 jobs, including 53,000 in businesses with between 50 and 249 employees and 16,000 in organizations with between 250 and 499 employees. Large companies with 500 employees or more gained 61,000 jobs.
For people who changed jobs, year-over-year pay gains were 7.6%, up from the prior month and the first increase since November 2022. However, pay gains for those who stayed in their jobs continued to decelerate, reaching 5.1%, the smallest gain since August 2021. The median change in annual pay for job stayers in professional and business services was 5.1%.
"For job changers we actually saw a bump up," said Richardson. "Job changers are more sensitive to the current labor market, activity and conditions. They're the ones who have changed jobs over the course of the year, and we saw the first increase in pay gains for job changers since November 2022. This is a wage picture that's still not boiling, but simmering and worth paying attention to in terms of whether or not inflation can indeed cool down to that 2% sweet spot that the Fed is watching."
