Private companies added 63,000 jobs in February, January revised to just 11,000 additions, ADP says

ADP reported that private companies added 63,000 jobs in February, a modest improvement over the downwardly revised 11,000 additions in January, as the payrolls processing firm released its latest monthly employment update on Wednesday. The February figure exceeded the Dow Jones consensus estimate of 48,000, suggesting private sector hiring performed better than anticipated despite concerns about economic slowdown. However, the report highlighted a continued lack of breadth in job creation, with most gains concentrated in just two sectors while most other industries experienced stagnant growth or declines. Education and health services emerged as the primary driver of employment, adding 58,000 jobs during the month and easily leading all sectors. Construction followed with 19,000 new positions, but these two industries offset weakness across the broader economy. Professional and business services saw a significant decline of 30,000 positions, while manufacturing lost 5,000 jobs despite President Donald Trump's efforts to use tariffs to reshore industrial positions. Trade, transportation and utilities declined by 1,000, with information services being the only other notable gainer at 11,000 new jobs. On the compensation front, pay growth remained solid for those staying in their jobs at 4.5%, unchanged from January. However, wage gains for job switchers decreased to 6.3%, a 0.3 percentage point decline from the previous month and the lowest level since ADP began tracking this metric. 'We've seen an increase in hiring and pay gains remain solid, especially for job-stayers,' said ADP chief economist Nela Richardson. 'But with hiring concentrated in only a few sectors, our data shows no widespread pay benefit from changing jobs.' The February report also revealed a shift in business size dynamics, with small businesses (fewer than 50 employees) adding 60,000 jobs, while large corporations (500+ workers) contributed 10,000 and medium-sized firms reported a loss of 7,000 positions. This employment data comes amid broader economic concerns, including inflationary pressures exacerbated by geopolitical tensions in the Middle East, with Federal Reserve officials indicating growing confidence that the labor market is stabilizing while traders push back expectations for interest rate cuts.