Prime Highlights:
Private employers added just 77,000 jobs in February, well below the 148,000 forecast and the 186,000 revised figures for January.
The trade, transportation, and utilities sector lost 33,000 jobs, while education and health services saw a decline of 28,000 positions.
Key Background:
Private employers added just 77,000 jobs in February, falling significantly short of both the upwardly revised 186,000 in January and the 148,000 forecasted by economists, according to a report from payroll processing firm ADP. This marked the smallest increase in job creation since July and raised concerns about a potential slowdown in economic growth.
The underwhelming job growth comes amid rising uncertainty over President Donald Trump’s tariff policies, which have raised fears about potential inflationary pressures and stunted growth. ADP’s Chief Economist, Nela Richardson, noted that policy uncertainty and reduced consumer spending could be contributing factors to the slowdown in hiring, suggesting that employers may be adopting a cautious approach.
One of the most significant setbacks was observed in the trade, transportation, and utilities sector, which saw a loss of 33,000 positions. Additionally, education and health services experienced a decline of 28,000 jobs, and the information services sector, affected by ongoing shifts in artificial intelligence, reported a loss of 14,000 positions. These declines reflect the growing concerns tied to economic uncertainty.
On a positive note, the leisure and hospitality industry added 41,000 jobs, while professional and business services grew by 27,000, and both financial activities and construction saw gains of 25,000. Manufacturing also contributed with a rise of 18,000 jobs, despite signals from the ISM manufacturing survey that companies were becoming more cautious with hiring.
The report also highlighted a shift in employment trends, with large firms (those employing 500 or more workers) reporting a gain of 37,000 jobs, while smaller firms with fewer than 50 employees saw a loss of 12,000 positions. This shift suggests that larger employers are more optimistic about their hiring prospects. The ADP report serves as a precursor to the Bureau of Labor Statistics’ monthly jobs report, expected on Friday, which will provide further insight into the state of the labor market.
