U.S. firms added 117k jobs in February, ADP reports

Yahoo Finance’s Julie Hyman, Myles Udland, Emily McCormick, and Brian Sozzi break down the ADP National Employment Report and get a closer look into the U.S. labor market amid the pandemic.

Video Transcript

MYLES UDLAND: But we begin today with those ADP job numbers just crossing the tape, coming in a little bit softer than expected. Yahoo Finance's Emily McCormick joins us with some of the details on that report, And, Emily, this coming just a couple of days before that big jobs report on Friday.

EMILY MCCORMICK: That's right, Myles. And this morning we did get that miss on private payroll growth for February. Private payrolls in the US rising by a disappointing 117,000 for the month of February, according to ADP. And this followed an upwardly revised gain of 195,000 private payrolls in January.

But that said, consensus economists expected a rise of 205,000 private payrolls, and Paul Ashworth of Capital Economics called this report a, quote, "disappointment given that the drop-off in coronavirus case numbers and the resulting lifting of containment measures should be giving the economy a bigger shot in the arm," end quote.

Now taking a look at jobs by sector, we did see service-providing businesses recover more jobs last month to the tune of 131,000. That was led in turn by trade, transportation, and utilities industries with a rise of 48,000 payrolls. Now we also saw gains in education and health-services jobs, and even the badly beaten down leisure and hospitality industries saw payrolls rise by 26,000. Now taking a look at the goods-producing sector, we did see some pressure in construction and manufacturing with both of those industries losing payrolls in February, but we should mention that there was harsh winter weather across much of the country in February that may have been weighing on those industries.

Now finally, one thing to keep in mind as we look ahead to the Labor Department's monthly jobs report on Friday is that the ADP report has been an imprecise indicator of the results of that report in recent months. Over the course of 2020 it had typically been undershooting the private payrolls figure into the monthly jobs report, although for January it actually undershot the pace of the deceleration that we saw in private payroll growth. So overall, just one more data point here on the labor market that may be pointing to some slowing momentum, Myles.

MYLES UDLAND: All right. Yahoo Finance's Emily McCormick with the latest numbers from ADP.