Private Jobs Growth Rebounds to 63K
US private companies added 63,000 jobs in February, a notable rebound from January's revised 11,000 additions. However, stocks closed lower as Middle East conflict fueled volatility and oil jumped nearly 5% to January 2025 highs, reigniting inflation fears that could complicate Fed rate cut plans.
The February job gains were heavily concentrated in just two sectors: education and health services, which added 58,000 positions, and construction, which added 19,000. Conversely, the professional and business services sector shed 30,000 jobs, while manufacturing continued its decline with a loss of 5,000 roles. A breakdown by company size reveals that small businesses with fewer than 50 employees drove the entirety of the growth, adding 60,000 jobs. Large establishments added a modest 10,000 jobs, while medium-sized businesses actually cut 7,000 positions from their payrolls. Wage growth for employees who remained in their jobs held steady at a 4.5% year-over-year increase, the same as in January. However, the financial incentive for switching jobs continued to shrink, with pay growth for job-changers slowing to 6.3%. According to Nela Richardson, chief economist at ADP, the pay premium for employees switching to a new employer has now fallen to a record low. This suggests that while hiring has seen an increase, there is no widespread pay benefit from changing jobs due to the concentration of growth in only a few industries. This private payroll data comes just two days before the official U.S. Bureau of Labor Statistics (BLS) employment report. Economists are closely watching the BLS figures, with a Reuters survey predicting a more modest increase of 59,000 jobs for February.
