Financial News: U.S. Private Sector Employment Jumps In February, Wage

U.S. Private Sector Employment Jumps In February, Wage Growth Slows

03/08/2023 - 08:57:00 (RTTNews)

(RTTNews) - A report released by payroll processor ADP on Wednesday showed private sector employment in the U.S. increased by more than expected in the month of February.

ADP said private sector employment jumped by 242,000 jobs in February after climbing by an upwardly revised 119,000 jobs in January.

Economists had expected private sector employment to increase by 200,000 jobs compared to the addition of 106,000 jobs originally reported for the previous month.

Meanwhile, the report said annual wage growth for those remaining in their jobs slowed to 7.2 percent in February, reflecting the slowest growth in 12 months.

ADP said annual wage growth for job changers also decelerated to 14.3 percent in February from 14.9 percent in January.

"There is a tradeoff in the labor market right now," said ADP chief economist Nela Richardson. "We're seeing robust hiring, which is good for the economy and workers, but pay growth is still quite elevated."

She added, "The modest slowdown in pay increases, on its own, is unlikely to drive down inflation rapidly in the near term."

The stronger than expected monthly job growth came as employment in the service-providing sector shot up by 190,000 jobs, reflecting notable increases in employment in the leisure/hospitality and financial activities industries.

Employment in the goods-producing sector also rose by 52,000 jobs, as job growth in the manufacturing and natural resource/mining industries more than offset a loss of jobs in the construction industry.

The report also said employment at large and medium establishments jumped by 160,000 jobs and 148,000 jobs, respectively, while employment at small establishments fell by 61,000 jobs.

On Friday, the Labor Department is scheduled to release its more closely watched monthly employment report, which includes both public and private sector jobs.

Economists currently expect employment to jump by 203,000 jobs in February after surging by 517,000 jobs in January, while the unemployment rate is expected to hold at 3.4 percent.

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