Economy Shows Strength, Adding 214,000 Jobs

ADP graphic Feb 2016

The private sector added 214,000 new workers last month, according to this morning’s ADP National Employment Report. The increase handily beat forecasts, putting private job growth in the 190,000 range and boosted confidence the U.S. economy is still growing despite slowdowns elsewhere.

Friday, the U.S. Labor Department will report the government’s detailed count of February’s employment changes. That report, which includes government jobs, is expected by economists to show a more modest payroll growth of about 190,000 non-farm jobs. The unemployment rate of 4.9 percent is forecast to remain unchanged.

Nevertheless, February is likely to show a marked improvement over the Labor Department’s initial count of 151,000 new jobs in January. (Friday’s report may include revisions to both January and December.)

Mark Zandi, chief economist of Moody’s Analytics, which produces the report with ADP, the HR services and payroll processor company, said, “Despite the turmoil in the global financial markets, the American job machine remains in high gear. Energy and manufacturing remain blemishes on the job market, but other sectors continue to add strongly to payrolls. Full-employment is fast approaching.”

A report from The Conference Board on job openings in February was more cautionary. The non-profit research group’s count of online job postings declined by 162,100 listings.

“While 2015 showed slow positive growth averaging about 25,000 ads per month, the first two months of 2016 have shown weakness in labor demand,” said Gad Levanon, managing director of macroeconomic and labor market research at The Conference Board. “The overall level of demand still remains high, but the very weak start of 2016 suggests a possible temporary weakening in employer demand for labor.”

The ADP report showed small employers continued to be a primary driver of job growth adding 76,000 workers in February. Large employers in the ADP report, those with more than 500 workers, also increase their headcount by 76,000. Of that, those with more than 1,000 employees accounted for 62,000 new jobs.

According to the ADP data, hiring last year by company size looked like this:

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  • 1.1 million new jobs added by small employers (up to 50 workers);
  • 829,000 added by employers with 50-499 workers;
  • 153,000 added by employers with 500-999 workers;
  • 359,000 added by employers with more than 1,000.

In February, most industry sectors added workers:

  • Construction 27,000
  • Manufacturing -9,000
  • Trade/transportation/utilities 20,000
  • Financial activities 8,000
  • Professional/business services 59,000

The decline in manufacturing jobs was the second largest in the last five years. In September, ADP said manufacturers shed 18,000 jobs.