Private-sector job growth accelerates to 214,000, easing recession concerns
Angelo Falcone, left, is interviewed by Eric Larkee for a bartender job at a job fair held by the Genuine Hospitality Group in Miami on Jan. 27.
Private-sector job growth accelerated last month in the face of financial market turmoil, with U.S. businesses adding a solid 214,000 net new positions, payroll firm Automatic Data Processing said Wednesday.
The job gains were up from a downwardly revised 193,000 in January.
The ADP figure, a harbinger of the Labor Department’s broader jobs report coming Friday, beat analyst expectations of 185,000 and eased concerns that the U.S. economy might be slipping toward a recession.
“Despite the turmoil in the global financial markets, the American job machine remains in high gear,” said Mark Zandi, chief economist at Moody’s Analytics, which assists ADP in preparing the monthly report.
Low oil prices, the strong dollar and weak global growth took their toll on U.S. manufacturers, which shed 9,000 net jobs in February. The sector added 3,000 jobs the previous month.
But professional and business services companies increased their payrolls by 59,000, up from 38,000 in January. And the construction industry had another strong month, with firms adding 27,000 net new positions, a small increase over January.
The ADP report solidified expectations that overall job growth -- private and public sector -- improved last month.
The Labor Department is expected to report Friday that the U.S. economy added 190,000 net new jobs last month. That would be an improvement over a disappointing 151,000 job gains in January.
The unemployment rate is expected to hold steady at 4.9%, matching an eight-year low. Wage gains are forecast to continue, but at a slower pace than in January.
Continued strength in the labor market eases concerns that the U.S. could be nearing another recession in the face of weak global growth.
The latest ADP data indicate that the nation is “miles away from a recession,” said Chris Rupkey, chief financial economist at Union Bank in New York.
“The rest of the world is slowing perhaps, but that isn’t the story here,” he said.
This week, Moody’s Analytics increased its probability of a recession in the next six months to 21%, from 16% in December. But the risk remains low.
Federal Reserve policymakers are watching the labor market closely as they decide whether the economy is strong enough to handle another small hike in a key short-term interest rate.
Strong job creation and higher wages could push Fed officials to nudge up the still-low federal funds rate by 0.25 percentage point when they meet March 15-16.
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