U.S. "Small Non-Farm" Jobs Increase by 63,000, Surpassing Expectations, Indicating Signs of Stabilization in the Labor Market

The latest “non-farm” report exceeded expectations, reflecting signs of stabilization in the U.S. labor market.

On Wednesday (March 4), before the U.S. stock market opened, Automatic Data Processing (ADP) released data showing that private sector employment increased by 63,000 jobs in February, the highest level since August last year, surpassing the market forecast of 50,000. However, January’s figure was revised down from 22,000 to 11,000.

Breakdown data shows that the entire goods industry added a total of 16,000 jobs, with construction increasing by 19,000, natural resources and mining increasing by 2,000, and manufacturing decreasing by 5,000.

In the service sector, education and health services added 58,000 jobs, information industry increased by 11,000, finance added 2,000, leisure and hospitality increased by 1,000, and “other services” grew by 6,000.

At the same time, professional/business services decreased by 30,000, and trade/transportation/utilities decreased by 1,000.

By company size, employment at small businesses (1-49 employees) increased by 60,000 compared to last month, medium-sized businesses (50-499 employees) decreased by 7,000, and large businesses (500+ employees) increased by 10,000.

The ADP report states that February saw a significant increase in hiring, marking the best employment growth since July last year (when the increase was 104,000), led by construction, education, and healthcare sectors.

The report also shows that employee wages from job changers rose by 6.3% year-over-year, slowing down from January; wages for retained employees increased by 4.5%.

Nela Richardson, ADP’s Chief Economist, said: “We see an increase in hiring, and wage growth remains steady, especially for employees who did not change jobs.”

“But since hiring is concentrated in a few industries, job switching has not led to widespread wage increases. In fact, the wage premium from job changes in February fell to a record low.”

Analysts believe this report indicates that after nearly stagnating at the start of the year, the labor market is slowly stabilizing.

As economic policy uncertainties decrease, some employers are ramping up hiring again, and tax cuts may also support investment and employment growth.

Previously, Federal Reserve officials generally stated that the labor market is stabilizing, which will allow them to keep interest rates unchanged in the short term, focusing more on stubborn inflation issues.

(Source: Caixin Global)