Private-sector job creation grew less than expectated in February, as the services and goods-producing sectors both slowed from recent months, according to a report from ADP.
Companies added 212,000 positions for the month, down from an upwardly revised 250,000 in January and the slowest pace since August 2014, the report filed by ADP and Moody’s Analytics showed.
Economists surveyed by Reuters were looking for an increase of 220,000.
Most of the gains came in the service sector. Though the group added 181,000 positions for the month, that was 12 percent less than the 206,000 in January. Professional businesses and services also slowed, adding 34,000 compared to January’s 49,000. Trade/transportation and utilities also declined, from 50,000 to 31,000.
Despite the miss compared to expectations, Moody’s economist Mark Zandi said the employment picture continues to improve.
“At this rate of job growth, the economy is coming into full employment,” Zandi told CNBC. “It will be there in a year and a half. Between now and then, wage growth will accelerate to a more substantial degree.”
One of the bright spots in the report was financial services, which grew by 15,000 to mark the largest gain since March 2006, ADP said.
Small businesses again set the pace, adding 94,000 positions, down from January’s 97,000. Medium-sized firms (with 50 to 499 employees) plunged, dropping from 106,000 to 63,000. Large businesses added 56,000 jobs, which was an improvement from the previous month’s 40,000.
Construction contributed 31,000 new positions while manufacturing added just 3,000.
The ADP report comes two days before the government’s nonfarm payrolls report to be released Friday. Economists are expecting that count to show 240,000 new jobs.
ADP’s report is occasionally used to adjust that forecast if the numbers are well out of consensus. However, Paul Dales, senior U.S. economist at Capital Economics, said he won’t be adjusting his expectation for 230,000 jobs in the government’s report.
“In recent months ADP’s initial estimate has underestimated the increase in official payrolls,” Dales said.
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