U.S. private employers added back fewer jobs than expected in February, disappointing economists who had anticipated that the early stages of the vaccine rollout and falling COVID-19 cases would allow hiring to pick up strongly during the month.
Private payrolls in the U.S. grew by 117,000 in February, ADP said in its closely watched monthly report Wednesday morning. This followed an upwardly revised gain of 195,000 payrolls in January, which had in turn reversed a drop of about 75,000 payrolls in December. Consensus economists expected a rise of 205,000 private payrolls for February, according to Bloomberg consensus data.
"The modest 117,000 gain in the ADP measure of private payrolls for February, down from an upwardly revised 195,000 increase the month before, is a disappointment given that the drop-off in coronavirus case numbers and the resulting lifting of containment measures should be giving the economy a bigger shot in the arm," Paul Ashworth, chief U.S. economist for Capital Economics, wrote in a note Wednesday morning.
Service-providing businesses made more headway in recovering jobs last month. Across the private services sector, payrolls rose by 131,000 in February, led by a gain of 48,000 in trade, transportation and utilities industries. Education and health services payrolls followed with a rise of 35,000 payrolls, and leisure and hospitality jobs rose by 26,000. Within services, only information payrolls fell in February, though financial activities jobs registered no change.
Manufacturing and constructions jobs in the goods-producing sector dipped, however, as winter weather likely weighed in part on employment in these industries. Private construction jobs fell by 3,000 in February, while manufacturing payrolls fell by 14,000.