ADP Employment Numbers: Different Month, Same Story
December, January, and now February have seen levels of job creation far too low to dig the U.S. economy out of the crater in the labor market created by the financial crisis and Great Recession. With the release of payroll processor ADP’s National Employment Report for the month of February, economists were given a sign that employment gains were weak in the first months of the year. U.S. private-sector employers added just 139,000 jobs to payrolls, a figure well below the twelve-month average, according to ADP Chief Executive Carlos Rodriguez. As in previous months, Moody’s Analytics chief economist Mark Zandi, whose firm helps compile the payroll processor monthly tally, blamed frigid temperatures, not underlying economic trends, for the poor growth.
“February was another soft month for the job market,” he said in the report. “Bad winter weather, especially in mid-month, weighed on payrolls.” Zandi noted that job growth is expected to improve when warmer weather returns. It’s true that cold weather across much of the United States has curtailed residential construction and home sales, hobbled manufacturing output, and damped retail sales — especially at car dealerships. Zandi told CNBC that “the very cold weather is playing havoc on all the economic data.” But some economists argue that larger forces may be at play. Factors like rising mortgage rates could be stifling economic growth, which is expected to accelerate this year due to a newfound strength in consumer spending created by rising household wealth and decreasing debt.
As Zandi pointed out, weak employment gains were constant “across a number of industries.” But, as usual, the service-producing sector created far more jobs than the goods-producing sector, with payroll additions numbering 120,000 in the former category and only 19,000 in the latter. Factories added just 1,000 new positions last month; construction firms added 14,000. Meanwhile, trade, transportation, and utilities companies added 31,000 jobs, and professional and business service providers added 33,000 jobs. Companies offering financial services cut staff by 2,000 positions. By company size, ADP data showed small business led the job gains, with firms employing between one to forty-nine workers adding 59,000 jobs to payrolls, businesses employing between fifty to 499 people adding 35,000, and large corporations employing more than 500 people adding 44,000.