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

• Health services and construction accounted for nearly all job gains, adding 58,000 and 19,000 positions respectively, while professional/business services lost 30,000 jobs and manufacturing declined by 5,000
• The wage gap between job switchers and job stayers narrowed to its lowest level since ADP began tracking: pay grew 4.5% for workers staying in jobs versus 6.3% for switchers, down from prior months
• Small businesses (under 50 employees) drove hiring with 60,000 additions, while large companies (500+ workers) added only 10,000 and medium-sized firms cut 7,000 positions

Summary: Private Sector Job Growth Shows Modest Improvement but Narrow Concentration

Key Figures:

• Private companies added 63,000 jobs in February, exceeding the consensus estimate of 48,000
• January figures were sharply revised downward from initial reports to just 11,000 additions
• Wage growth for job-stayers held at 4.5%; job-switchers saw 6.3% gains (down 0.3 percentage points)
• The gap between job-stayer and job-switcher wages reached its lowest level since ADP began tracking

Sector Concentration:

Job growth remained highly concentrated in two sectors:

• Education and health services: +58,000 jobs (primary driver)
• Construction: +19,000 jobs

Other sectors showed weakness:

• Professional/business services: -30,000
• Manufacturing: -5,000 (despite Trump administration reshoring efforts)
• Trade, transportation, utilities: -1,000

Company Size Trends:

Small businesses (<50 employees) led hiring with 60,000 additions, while mid-sized firms lost 7,000 positions and large companies added 10,000.

Market Implications:

The narrow breadth of job creation raises concerns about labor market health despite headline numbers beating expectations. ADP Chief Economist Nela Richardson noted hiring concentration limits widespread pay benefits for job-switchers. The data comes amid Federal Reserve deliberations on interest rates, with traders now pricing the next rate cut for July at earliest. Oil price concerns and geopolitical tensions are adding inflation pressure.

Outlook:

Friday's official BLS nonfarm payrolls report is expected to show 50,000 total jobs added (including government), with unemployment holding at 4.3%.