ADP report shows hefty rise in private sector employment


By Poroma Pant

The U.S private sector enjoyed a slightly stronger-than-expected increase of 214,000 jobs in February – suggesting that the U.S job market remains resilient despite an unsettling stock-market falloff — according to a payroll-abased report carried out by ADP Research Institute.

“Despite the turmoil in the global financial markets, the American job machine remains in high gear,” Mark Zandi, chief economist at Moody’s Analytics Inc. said in a prepared statement. Moody’s co-produces the figures with ADP.

ADP releases its payroll figures two days ahead of the U.S Bureau Labor Department’s more comprehensive jobs report, which is due out Friday.

The February ADP numbers handily beat economists’ estimate of 190,000 new jobs, and also exceeded the prior month’s downward-revised figure of 193,000.

Growth in hiring is a key factor, because rising employment fuels momentum for consumer spending, which in turn contributes nearly three-fourths of the country’s economic activity.

Private Sector Employment by Industry

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The service sector created the highest number of jobs last month . (Poroma Pant/MEDILL)

The service sector carried the vast majority of the growth, ADP said, by adding 208,000 jobs. That compares with just 5,000 for goods-producing employers. ADP tracks private-sector employment, but its report doesn’t include data on public-sector jobs.

Although overall job conditions in the private sector showed strength last month, there were a few worrying signs, according to ADP.

“Energy and manufacturing remain blemishes on the job market,” said Zandi. Manufacturers have been hurt by economic weakness overseas, a strong dollar that makes American products expensive overseas and cutbacks in the energy industry following a big drop in oil prices.

Manufacturers cut their workforce last month by 9,000 workers, which was the second biggest decline in five years, while the financial sector added 8,000 workers which was the fewest hires since August of last year.

While the ADP reports always draws interest as a means of helping predict the crucial employment report the government releases the first Friday of every month, the report “is not always a reliable predictor of the Bureau of Labor data,” noted Daniel Silver, economist at J.P Morgan & Co.

“Over 2015, the ADP report tended to overshoot (Labor Departmet) figures by a 13,000 job count per month.” industry experts at Comerica Bank Inc. said in an online report.

On Friday, the U.S. Bureau of Labor Statistics will release its monthly jobs data for February, including the public sector. (Ed Brown/