ADP Reports 63,000 New Private Sector Jobs in February; January Revised to 11,000

• Education and health services added 58,000 jobs while construction contributed 19,000, offsetting declines in professional/business services (-30,000) and manufacturing (-5,000)
• Pay grew 4.5% for workers staying in their jobs, while wage gains for job switchers fell to 6.3%, marking the smallest gap since ADP began tracking this metric
• Small businesses (under 50 employees) drove hiring with 60,000 new jobs, while large companies (500+ workers) added only 10,000 positions

ADP February Employment Report Summary

Key Employment Figures:

• Private sector added 63,000 jobs in February, exceeding the consensus estimate of 48,000
• January figures dramatically revised downward from original estimate to just 11,000 jobs
• The February gain represents modest improvement but remains historically weak

Sector Concentration:

Job growth remained narrowly concentrated in just two sectors:

• Education and health services: +58,000 (leading all sectors)
• Construction: +19,000
• Professional and business services: -30,000
• Manufacturing: -5,000 (declining despite Trump administration reshoring efforts)
• Trade, transportation, and utilities: -1,000

Wage Growth Data:

• Job stayers: 4.5% annual wage growth (unchanged from January)
• Job switchers: 6.3% wage gains (down 0.3 percentage points)
• The gap between switcher and stayer pay reached its lowest level since ADP began tracking this metric

Company Size Trends:

Small businesses (under 50 employees) drove hiring with 60,000 additions, while large companies (500+ workers) added only 10,000, and medium-sized firms declined by 7,000.

Market Implications:

The weak breadth of hiring signals ongoing labor market fragmentation. ADP Chief Economist Nela Richardson noted the lack of "widespread pay benefit from changing jobs," indicating reduced worker mobility advantages.

The report precedes Friday's BLS nonfarm payrolls data, expected to show 50,000 total jobs added with unemployment steady at 4.3%. Fed rate cut expectations have shifted to July at earliest, with concerns about oil prices potentially driving inflation higher amid geopolitical tensions.