Private sector employers added 242,000 jobs in February, and annual pay rose 7.2%, according to payroll giant ADP, although some slowdowns are occurring, with job losses in professional and business services.
ADP
"We only report on the super sectors, so we don't know if it's accounting specifically," said ADP chief economist Nela Richardson in response to a question from Accounting Today during a press conference Wednesday. "But what we've seen in the headlines is that there has been some pressure in the management consulting space, and big companies have seen some layoffs there. During the recovery, administrative support services were driving a lot of growth, and then that stalled out as people did more hybrid work. That also might be part of this, as firms solidified their remote versus hybrid [arrangements], maybe the back-office support services roles are not necessarily being hired at the same rate as they had been during other points of the economic recovery."
ADP also found that the goods-producing sector of the economy added 52,000 jobs in February, including 43,000 in manufacturing and 25,000 in natural resources and mining, although the construction industry lost 16,000 jobs.
The 12-month moving average for annual pay growth for people who stayed in their jobs slowed to 7.2% in February, the slowest pace in 12 months. Pay growth decelerated for job changers as well, falling to 14.3% from 14.9%. In the professional and business services sector, annual pay growth was 6.5%, while in financial activities, it was 7.3%.
At small businesses with one to 19 employees, annual pay growth was 5.6%, while at businesses with 20 to 49 employees, it was 7.1%. For medium-size businesses with 50 to 249 employees, annual pay growth was 7.5%, and for companies with 250 to 499 employees, it was 7.4%. At large companies with 500 employees or more, annual pay growth was 7.5%.
"Therein lie some of the challenges that small firms are facing," said Richardson. "They're just not able to compete as much in this environment with larger firms. We are seeing some loosening. From firms of all sizes, we're hearing it's a little bit easier to find qualified workers, but still it's harder it seems for small firms."
Small businesses also seemed to be laying off many employees, losing 61,000 employees last month, including 56,000 jobs at businesses with between one and 19 employees, and 5,000 at businesses with between 20 and 49 employees. Medium-size businesses, on the other hand, gained 148,000 jobs, including 77,000 at businesses with between 50 and 249 employees, and 71,000 at businesses with 250 to 499 employees. Large companies with 500 employees or more added 160,000 jobs.
