ADP Report: February Records 140,000 Job Additions, Pay Rises in U.S. Private Sector

Private Sector Job Growth Continues

The private sector saw a significant boost in employment in February 2024, with 140,000 jobs added, according to the latest ADP National Employment Report. This figure, although slightly below the estimated 149,000, indicates a consistent expansion in the labor market. Notably, annual pay increased by 5.1%, reflecting a positive trend in earnings.

Industry and Regional Breakdown

In terms of industry sectors, goods-producing roles contributed 30,000 jobs, driven largely by construction and manufacturing. The service-providing sector added a robust 110,000 jobs, with notable growth in trade, transportation, utilities, financial activities, and the leisure/hospitality sector.

Regionally, job growth was distributed across the U.S. The Northeast added 20,000 jobs, while the Midwest saw a significant 39,000 new positions. The South and West regions contributed 37,000 and 42,000 jobs, respectively, indicating a nationwide trend of employment growth.

Establishment Size Variation

Small establishments (those with 1-49 employees) saw an increase of 13,000 jobs. Medium-sized establishments (50-499 employees) led the growth with 69,000 new jobs. Large establishments (500+ employees) also showed strong performance, adding 61,000 jobs.

Evolving Pay Trends

In February, pay gains for job-changers rose to 7.6%, marking the first increase in this category since November 2022. However, pay gains for job-stayers decelerated, recording the smallest increase since August 2021 at 5.1%.

Short-Term Market Forecast

Considering the steady job growth and evolving pay trends, the short-term outlook for the U.S. labor market appears cautiously optimistic. While job gains are solid and pay increases are sustained, the deceleration in pay gains for job-stayers warrants attention. The market seems poised for steady growth, but investors and traders should watch for any signs of shift in employment trends or wage inflation that could influence Federal Reserve’s rate decisions. Overall, the market sentiment leans slightly bullish, supported by the sustained job creation across multiple sectors and regions.