Prior to the release of the monthly ADP National Employment Report, economists polled by Dow Jones predicted the addition of 155,000 jobs to private payrolls in February. This morning, payrolls processor ADP reported that private employers added 183,000 jobs last month.
“The labor market remains firm, as private-sector payrolls continued to expand in February,” said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute, in a statement. “Job creation remained heavily concentrated in large companies, which continue to be the strongest performer.”
Large companies with 500 or more employees added 133,000 jobs in February. Medium-sized companies added 26,000 jobs, while small companies added 24,000 jobs.
The construction industry added 18,000 jobs last month, while manufacturing and mining shed 4,000 and 3,000 jobs respectively. On the service-providing side, several industries added jobs in February, including leisure/hospitality (+44,000 jobs), health care (+43,000 jobs), professional/business services (+38,000 jobs) and trade/transportation/utilities (+31,000 jobs).
ADP revised downward the previous month’s tally; private employers added 209,000 jobs in January instead of 291,000 jobs, as originally reported.
Coronavirus Hasn’t Affected the Job Market … Yet
“COVID-19 will need to break through the job market firewall if it is to do significant damage to the economy,” said Mark Zandi, chief economist of Moody’s Analytics, which produces the report with ADP. “The firewall has some cracks but judging by the February employment gain it should be strong enough to weather most scenarios.”
However, Zandi cautioned that the numbers were boosted by warmer weather and that job gains would slow.
“We’re going to get much weaker job numbers going forward,” Zandi said, speaking with MarketWatch. “Even without the virus, we were going to get weak numbers and now with the virus, we’re going to get much weaker numbers. It is just a matter of time.”
Zandi continued, “Economists have a really hard time saying over 50% probability of recession. I assure you, almost every economist out there is thinking over 50% probability.”
Friday’s report from the Labor Department will contain data on non-farm job gains, plus the updated unemployment rate and information on wage growth. According to CNBC, economists expect payroll gains of 175,000 jobs and an unemployment rate of 3.5%.
The PayScale Index, which measures the change in pay for employed U.S. workers, showed 2.5% year-over-year wage growth for Q4 2019. However, real wages — the value of workers’ pay with inflation — have declined 9% since 2006.
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