'Red-hot' jobs market adds another 235,000 positions in February: ADP/Moody's
- Private payrolls rose by 235,000 in February, well above Wall Street estimates of 195,000, according to a report from ADP and Moody’s Analytics.
- Growth actually decelerated slightly, as January posted an upwardly revised 244,000 from the initially reported 234,000.
- The Moody’s/ADP report precedes the more closely watched Labor Department nonfarm payrolls count, with economists expecting that number to be around 200,000.
Job creation saw another powerful month in February, with companies adding 235,000 positions, ADP and Moody’s Analytics reported Wednesday.
The total again defied Wall Street expectations, as economists surveyed by Thomson Reuters were expecting payrolls to grow by 195,000. Growth actually decelerated slightly, as January posted an upwardly revised 244,000 from the initially reported 234,000.
February marked the fourth month in a row that private payrolls hit 200,000 or better.
“The job market is red hot and threatens to overheat,” Mark Zandi, chief economist at Moody’s, said in a statement. “With government spending increases and tax cuts, growth is set to accelerate.”
February saw broad-based gains that stretched across both the services and goods-producing sectors.
Leisure and hospitality led industry groups with 50,000 jobs, while professional and business services contributed 46,000 and trade, transportation and utilities added 44,000.
However, construction rose 21,000 and manufacturing notched 14,000 new positions. In all, goods-producing industries increased by 37,000 while all services-related businesses added 198,000.
In terms of business size, the gains again were spread: Medium-sized firms (50-499 employees) led with 97,000. Large businesses and small firms contributed 70,000 and 68,000 respectively.
The gains come amid concerns that a tight jobs market could put upward pressure on wages and generate an inflation spike that would force the Federal Reserve to raise interest rates faster than the market anticipates.
However, monthly jobs reports continue to defy expectations that payroll growth is bound to slow as the unemployment rate, currently at 4.1 percent, nears the level that economists generally consider full employment.
Dallas Fed President Robert Kaplan told CNBC on Tuesday that the central bank will need to hike three times this year to keep the economic expansion going.
The Moody’s/ADP report precedes the more closely watched Labor Department nonfarm payrolls count, which comes Friday. The numbers often differ considerably.
Last month’s government count showed that average hourly earnings rose at the fastest pace in more than eight years, fueling more inflation concerns and sending the stock market briefly into a correction. Economists are looking for Friday’s report to show growth of about 200,000 new jobs.
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