US Private Employment Increased by 140,000 in February, Below Market Expectations (Update)

ADP Report
Increase Accelerates Compared to January... "Employment Growth Remains Strong"

In February this year, private employment in the United States increased less than market expectations. However, the increase exceeded that of the previous month, indicating that the labor market remains robust.

[Image source=AFP Yonhap News]

According to the US employment report released on the 6th (local time) by ADP, a US private labor market research firm, private sector new job creation in February was 140,000, falling short of the market expectation of 149,000. However, the increase was larger than January's 111,000 new private jobs.

By sector, the leisure and hospitality sector saw the largest increase with 41,000 jobs added. This was followed by construction with 28,000, trade, transportation, and utilities with 24,000, finance with 17,000, other services with 14,000, and education and healthcare services with 11,000.

Wages for workers who have been at the same job for the past 12 months rose by 5.1% year-over-year. This is the smallest increase since August 2021. It is interpreted as a sign that wage-driven inflationary pressures are easing.

Nela Richardson, ADP Chief Economist, stated, "The employment growth remains solid," adding, "Although wage growth has slowed, it still exceeds inflation." She further analyzed, "The labor market is dynamic, but it is not at a level to change the Federal Reserve's interest rate decisions this year."

Demand in the US labor market was slightly stronger than expected. According to the January Job Openings and Labor Turnover Survey (JOLTS) released by the US Department of Labor on the same day, job openings in January recorded 8.86 million. This was lower than the previous month (8.889 million) but exceeded market expectations (8.8 million). US job openings have been declining since peaking at 12 million in March 2022.

The market is focusing on the US Department of Labor's February employment report, which most accurately reflects the US labor market situation. This report will be released on the 8th. The market expects nonfarm payrolls to increase by 190,000 in February, nearly halving compared to January's 353,000.