ADP: US Payrolls Rise At A Solid Rate In February

US companies added 214,000 workers to payrolls last month, according to the ADP Employment Report for February. The news offers more support for thinking that the economic expansion is in no immediate danger of sliding into a recession. In fact, today’s numbers inspire a degree of upside revision for the near-term outlook.

Last month’s 214,000 increase in private payrolls reflects a moderately stronger pace vs. the revised gain of 193,000 for January. Meanwhile, the year-over-year trend is showing signs of stabilizing after decelerating in recent months. ADP advises that payrolls increased 2.08% in February vs. the year-earlier level—unchanged from January’s annual gain.


“Large businesses showed surprisingly strong job gains in February, despite the continuation of economic trends that negatively impact big companies like turmoil in international markets and a strengthening dollar,” said Ahu Yildirmaz, who heads the ADP Research Institute. “The gains were mostly driven by the service sector which accounted for almost all the jobs added by large businesses.”

At the very least the new report strengthens the case for expecting a decent gain in this Friday’s official labor-market numbers for February. The consensus forecast via anticipates that the Labor Dept. will report that the US economy added 180,000 workers in the private sector last month—a projection that marks a moderate improvement over January’s sluggish increase of 158,000.

In fact, the numbers du jour imply that it may be time to revise Friday’s forecast up a few notches. Modeling the historical relationship between the ADP data and the government’s figures via a simple linear regression model points to an increase of 212,000 private payrolls for the Labor Dept.’s release after plugging in today’s update. Yes, the prediction, like all predictions, is subject to the usual caveats. That said, the February ADP report offers a bit more confidence for expecting that Friday’s update will deliver encouraging news on the employment front.