ADP released its February Employment Report Wednesday. The U.S. economy added 198,000 new private sector jobs in February. This surprised some because the month was marked by uncertainty over the sequester which went into affect on March 1.Employers, like Stock Market investors, have ignored the new normal in Washington.
January jobs revised upwards
In addition, ADP revised its January calculations upward. Last month it projected 192,000 new jobs but that number was revised to 215,000. That follows the announcement by the Commerce Department last week that GDP actually did not contract in the 4th quarter of 2012 as previously thought.
Most of the new jobs in February were added by small businesses which accounted for 77,000 of February’s jobs. Medium sized businesses employing between 50 and 500 workers increased employment by 65,000, and large companies added a surprising 57,000 new workers.
Small businesses generally lead the way in job creation in a good economy so the continued growth in this sector is a continued good sign for the recovery. The fact large businesses have added jobs is also significant because they have been sitting on the sidelines most of this recovery. Large companies are more likely to be affected by economic uncertainty and many expected the nonsense in Congress to make them cautions.
Manufacturing and construction added jobs
As is the case every month, the vast majority of the new jobs are in the service sector. In February 164,000 of the 198,000 new jobs were in service providing companies, only 34,000 were in good producing industries.
Trade, transportation, and utilities accounted for 45,000 new jobs; professional and business services came in second with 35,000, followed by construction which added a strong 21,000 new jobs in February despite winter storms. Manufacturing added 9,000 jobs—a low number but at least it showed continued growth in that sector after a decade of decline.
The ADP Report is compiled every month by ADP, a human resources and payroll service company in partnership with Moody’s Analytics. The ADP Report does not tract government jobs. The Bureau of Labor Statistics (BLS) will release its February report Friday. The BLS report is seen as the “official” jobs report, but ADP is often a leading indicator at least of the public sector.
“In February 2013, the U.S. private sector added a total of 198,000 new jobs, with most of this job growth occurring in the services sector,” noted Carlos A. Rodriguez, president and chief executive officer of ADP. “This growth can be attributed to comparable contributions across all three company size segments.”
Mark Zandi, chief economist of Moody’s Analytics, said, “The job market remains sturdy in the face of significant fiscal headwinds. Businesses are adding to payrolls more strongly at the start of 2013 with gains across all industries and business sizes. Tax increases and government spending cuts don’t appear to be affecting the job market.”
If Congress does not fix the sequester, the economy could shed jobs over the next 30-90 days. That could reverse this employment growth. It is a tragedy that our Congress seems to be doing everything it can to keep the economy down. The strong jobs report and the record hit by the Dow Tuesday shows the economy wants to rebound. Hopefully Congress will stop interfering.
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