The U.S. private sector added more jobs than anticipated last month as the leisure and hospitality sector bounces back from the slump caused by the pandemic.
Payroll provider ADP’s National Employment Report showed private sector employment increased by 242,000 last month, more than economists’ forecasts and above January’s upwardly-revised gain of 119,000.
Service-producing firms posted a rise of 190,000 jobs. Leisure and hospitality hiring once again led the advance, with a jump of 83,000. Financial activities picked up 62,000 positions. Jobs increased for education and health services (+35,000); other services (+34,000); information (+9,000); and trade, transportation, and utilities (+3,000). Hiring fell for professional and business services (-36,000).
Jobs at goods-producing businesses were up by 52,000, with most of that gain coming in manufacturing (+43,000). Hiring in natural resources rose by 25,000, while construction jobs declined by 16,000.
ADP noted year-over-year salary increases for those who stayed at their current job slowed to 7.2% from 7.3% in January, the smallest it's been in 12 months. Those who changed jobs posted a 14.3% advance, down from 14.9% in January.
There is a “tradeoff” in the labor market right now, with robust hiring but pay growth still quite elevated, said Nela Richardson, ADP’s chief economist. She added that last month’s modest slowdown in pay hikes on its own is unlikely to reduce inflation in the near term.
On Friday, the Labor Department is scheduled to release the February nonfarm payroll report, which is expected to show the economy picked up 203,000 jobs.