People work at a restaurant in Chelsea Market in Manhattan on February 2, 2024 in New York City.
Spencer Pratt | Getty Images
Payroll processing company ADP reported on Wednesday that private sector job growth improved in February, but at a slightly slower pace than expected.
Companies added 140,000 jobs this month, up from an upwardly revised 111,000 in January but slightly below Dow Jones estimates of 150,000.
Employment growth was seen in a variety of sectors, with leisure and hospitality adding 41,000 jobs and construction adding 28,000. Other strong performers included trade, transportation and utilities (24,000), financials (17,000) and other services categories (14,000).
Among them, 110,000 people came from the service industry, while goods producers increased by 30,000 people. Growth is concentrated among larger companies, with businesses with fewer than 50 employees accounting for only 13,000 of the total.
As employment grew, annual wages for those who remained in the workforce increased by 5.1%, which ADP said was the smallest increase since August 2021 and may indicate that inflationary pressures are receding.
The report comes as the labor market is increasingly concerned about signs that U.S. economic growth will stall this year, after U.S. gross domestic product (GDP) annualized growth in 2023 stabilized at around 2.5%.
Nela Richardson, chief economist at ADP, said: “Employment growth remains strong. Wage growth is trending lower but still above inflation.” “In short, the labor market is dynamic, but it will not affect the Fed this year. interest rate decision.”
ADP’s report precedes official nonfarm payrolls data released Friday by the Labor Department. In recent months, ADP has been below closely watched reports from the U.S. Bureau of Labor Statistics, which showed a gain of 353,000 jobs in January, more than three times ADP’s forecast.
Economists surveyed by Dow Jones expected Friday’s report to show an increase of 198,000.
