Private payroll growth disappointed in February, despite signs of economic growth that they otherwise encouraged, according to an ADP report.
Companies totaled only 117,000 positions during the month, well below the 225,000 forecasts of economists surveyed by Dow Jones.
The total also represented a sharp decline from the 195,000 jobs revised upwards in January.
The ADP report “is a disappointment given that the decline in the number of coronavirus cases and the resulting elimination of containment measures should give the economy a bigger blow to the arm,” said Paul Ashwoth, an economist at head of the United States at Capital Economics.
The weak reading of the ADP occurs despite the strong projections of economic growth in the first quarter. According to the Atlanta Federal Reserve GDPNow tracker, the United States is on track to gain 10% by the start of 2021.
“The job market continues to record a slow overall recovery,” said Nela Richardson, chief economist at ADP. “We are seeing large companies increasingly feel the effects of COVID-19 as employment growth in the goods-producing sector stops.”
All net employment growth came from services.
Trade, transport and utilities led the sectors last month with the incorporation of 48,000 positions. Education and health services rose 35,000, while the battered hospitality industry, which suffered the worst of the pandemic-related impacts, added just 26,000 jobs. The sector fell 3.8 million positions from its position a year ago, just before the worst of the Covid-19 crisis arrived.
Professional and business services contributed 22,000 in total.
Manufacturing lost 14,000 jobs during the month, while construction rolls declined by 3,000.
“With the pandemic still in the driver’s seat, the services sector remains well below pre-pandemic levels; however, this sector is likely to benefit more over time from reopening and increased consumer confidence,” he said. said Richardson.
Companies with between 50 and 499 employees experienced the highest growth, with 57,000 new jobs, while small companies added 32,000 and large companies contributed 28,000.
While the figures can vary widely, the ADP survey can sometimes provide clues about the most watched non-farm payroll report the Department of Labor publishes each month.
January produced just 49,000 non-farm jobs, according to the government, well below the ADP estimate, which is compiled with Moody’s Analytics. The February government report is expected to show a gain of 210,000, according to Dow Jones estimates.