Private employers in the United States added a mere 77,000 jobs in February, according to a report released by ADP on Wednesday. This figure falls significantly below the Dow Jones consensus estimate of 148,000, highlighting a slowdown in private sector job creation. The report comes amidst growing concerns over potential economic deceleration and tariff-related inflation.
ADP's findings serve as a precursor to the Labor Department's Bureau of Labor Statistics report on nonfarm payrolls, which is scheduled for release on Friday. The ADP report, often viewed as a barometer for broader employment trends, reflected an upward revision from January's figures to 186,000 new workers. However, February's numbers indicate a stark decline in job growth across various sectors.
The trade, transportation, and utility sector experienced a notable setback with a loss of 33,000 positions. In contrast, the services sector managed to add 36,000 new workers, while goods-producing industries contributed 42,000 new jobs in February. Despite these additions, the overall growth remains subdued against the backdrop of escalating tariff concerns and slowing economic momentum.
ADP reported a year-over-year pay increase of 4.7% in February, a figure that may further fuel inflationary pressures. Nela Richardson, ADP's chief economist, remarked on the current economic landscape, noting the potential impact of policy uncertainties and decreased consumer spending on employment figures.
"Policy uncertainty and a slowdown in consumer spending might have led to layoffs or a slowdown in hiring last month," said Nela Richardson, ADP chief economist.
The ADP report arrives at a time when apprehensions are mounting that President Donald Trump's tariff strategies could trigger another wave of inflation. The implications of these tariffs and their influence on job creation remain areas of concern for economists and policymakers alike.