US Private Payrolls Slow, Adding 63,000 Jobs in February
The U.S. labor market shows signs of cooling as private payrolls grew by just 63,000 in February, according to ADP. While annual pay was up 4.5%, the moderate job growth aligns with other data, like stable jobless claims, suggesting a resilient but no longer red-hot market.
The February jobs number, the strongest since July 2025, comes after a downwardly revised 11,000 jobs were added in January. This latest figure surpassed the consensus forecast of 50,000 private-sector jobs. The service sector was the primary driver of growth, adding 47,000 positions. This was largely fueled by a significant increase of 58,000 jobs in education and health services, along with an 11,000 gain in the information sector. However, the professional and business services sector shed 30,000 jobs. The goods-producing sector saw a more modest increase, adding 16,000 jobs. A gain of 19,000 jobs in construction helped offset a loss of 5,000 manufacturing positions. Small businesses, with fewer than 50 employees, were the engine of job creation in February, adding 60,000 positions. In contrast, medium-sized businesses with 50-499 employees lost 7,000 jobs, while large businesses added 10,000. Pay growth for those remaining in their jobs held steady at 4.5% year-over-year. However, the premium for switching jobs has diminished, with pay gains for job-changers slowing to 6.3%, a record low for that metric. Regionally, the South saw the largest increase in employment with 37,000 new jobs. The West added 19,000 and the Northeast gained 11,000, while the Midwest experienced a slight decline, losing 4,000 jobs.
