The US private sector added 216,000 new jobs in February as the labour market recovery continued to strengthen.
Job creation reported by ADP, the payroll processor, was slightly higher than the average 215,000 positions forecast by economists, and January’s reading was revised up to 173,000 from 170,000.
Joel Prakken, chairman of Macroeconomic Advisers, which conducts the ADP survey, said: “The last three monthly gains in employment … have averaged 223,000, compared to 156,000 per month over all of 2011. This pick-up is consistent with the recent acceleration of the nation’s gross domestic product.”
The report comes ahead of Friday’s labour department release of non-farm payrolls, which includes government jobs. Economists expect that survey to show that the economy added a net 210,000 jobs in February compared with 243,000 in January, with the private sector contributing 225,000 positions. The unemployment rate is forecast to hold at 8.3 per cent.
Gains in the ADP report were spread across size of business, with small companies – those employing fewer than 50 workers – contributing the most growth with 108,000 new hires. Medium-sized businesses added 88,000 jobs, while companies with more than 500 employees grew by 20,000 workers.
Phil Orlando, chief equity market strategist at Federated Investors, said: “These small and midsized firms are critically important. They are the engine of job creation here in the US.” He said that the government’s jobs reading “will eventually capture this bump in small and midsize hiring but with a lag.”
Scott Brown, chief economist at Raymond James, said he was also encouraged by the growth in smaller companies, which was “a very good sign for the recovery.” He noted, however, that concerns remain over the effect of the mild weather across much of the US, which may have brought forward some seasonal hiring, and over rising petrol prices, which he said may cause some companies to delay expansion plans.
Increases were seen in all sectors of Wednesday’s report. The services industries continued to lead growth, adding 170,000 jobs. In the financial sector, the 14,000 workers added was the largest monthly gain in two years.
Employment in goods-producing industries, which includes manufacturing, mining and construction, added 46,000 positions. Within that category, manufacturers hired 21,000 new workers and construction jobs increased for the fifth consecutive month, adding 16,000 jobs.
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