US Private Payrolls and Wage Growth Show Modest Gains in February

US Private Payrolls and Wage Growth Show Modest Gains in February

Key Points:

  • U.S. private payrolls increased by 140,000 jobs in February, slightly below economists’ expectations.
  • The trade, transportation, and utilities sectors led the growth, and there were notable construction and manufacturing employment increases.
  • Wages for workers staying in their jobs saw an annual increase of 5.1%, marking the slowest pace in 2.5 years.
  • Fed Chair Jerome Powell emphasized the need for confidence in sustainable inflation movement before considering rate reductions.

In February, U.S. private payrolls experienced a slight increase that fell slightly below expectations, signaling a potential cooling in the labor market. According to the ADP Employment report released on Wednesday, private payrolls rose by 140,000 jobs, following an upwardly revised 111,000 in January. This figure fell short of economists’ expectations, who had forecasted an increase of 150,000 jobs.

The growth in private payrolls was primarily led by the trade, transportation, and utilities sectors, which added 24,000 jobs. Construction employment also saw a notable increase of 28,000 positions, likely influenced by mild weather conditions. In financial activities, payrolls rose by 17,000 jobs, while manufacturing contributed 6,000 workers. However, the professional and business services sector experienced job losses, alongside the natural resources and mining sector.

Wages for workers who remained in their jobs increased 5.1% annually in February. While this still represents a substantial gain, it marks the slowest pace of wage growth in 2.5 years. January had recorded a 5.3% rise in wages for workers staying in their positions.

The ADP report, developed in collaboration with the Stanford Digital Economy Lab, precedes the more comprehensive and closely watched Labor Department’s employment report, which is set to be released on Friday. It’s worth noting that the ADP report has historically shown variances compared to official employment data, and its impact on the immediate monetary policy outlook is limited.

In testimony to lawmakers on Wednesday, Fed Chair Jerome Powell said that the central bank’s policy-setting committee does not foresee reducing the target range until greater confidence in sustainable inflation movement towards 2%.

As anticipation builds for the Labor Department’s upcoming report, economists predict an estimated rise of 160,000 jobs in private payrolls for February, following a notable increase of 317,000 in January. The total nonfarm payrolls are expected to grow by 200,000 jobs, with the unemployment rate likely to remain 3.7%. Annual wage growth is anticipated to slow to 4.4% from January’s 4.5%.

TechGolly editorial team led by Al Mahmud Al Mamun. He worked as an Editor-in-Chief at a world-leading professional research Magazine. Rasel Hossain and Enamul Kabir are supporting as Managing Editor. Our team is intercorporate with technologists, researchers, and technology writers. We have substantial knowledge and background in Information Technology (IT), Artificial Intelligence (AI), and Embedded Technology.

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