U.S. private payrolls climbed more than expected in February, pointing to ongoing labor market resilience.
According to the ADP National Employment report released on Wednesday, private employment climbed by 242,000 jobs in the past month. Statistics for January was updated to indicate 119,000 jobs added rather than the previously reported 106,000. Reuters questioned economists who had predicted a 200,000 increase in private employment.
Following a slew of recent positive economic indicators, Federal Reserve Chair Jerome Powell informed lawmakers on Tuesday that the U.S. central bank would likely need to raise interest rates more than anticipated. Powell also hinted that this month’s rate hike could be as much as half a percentage point.
In January, there was strong job growth and the unemployment rate dropped to 3.4%, which is below the 53-1/2 year low. In January, consumer spending sharply recovered and inflation increased.
The ADP report, created in collaboration with the Stanford Digital Economy Lab, was released on Thursday before the more thorough and anticipated Bureau of Labor Statistics employment report for February.
In the BLS employment report, it has not been a good indicator for predicting private payrolls. The first ADP estimate of 106,000 new private employment in January was significantly lower than the BLS estimate of 443,000 new private payrolls.
The initial prints of the linked BLS data have not consistently forecasted the first prints of the ADP data in the months since they began to be provided using a new methodology, according to Daniel Silver, an economist at JPMorgan in New York.
According to a Reuters poll of economists, there were probably 213,000 more jobs on private payrolls in February. It is anticipated that total nonfarm payrolls increased by 203,000 jobs in February after increasing by 517,000 in January.