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US private sector hiring up less than expected in February / Photo: © GETTY IMAGES NORTH AMERICA/AFP/File
US private sector hiring up less than expected in February
Job gains in the US private sector picked up in February, payroll firm ADP said Wednesday, a sign that could give the Federal Reserve some pause as it mulls the timing of interest rate cuts.
Private sector employment grew by 140,000 jobs last month, less than analysts expected although up from a revised 111,000 figure in January.
"The labor market is dynamic, but doesn't tip the scales in terms of a Fed rate decision this year," said ADP chief economist Nela Richardson in a statement.
She added that job gains remained "solid" and while salary increases were cooling, they are still above inflation.
ADP said pay gains for those who changed jobs picked up for the first time in more than a year.
But for those who remained in their jobs, wage hikes decelerated -- marking the smallest gain since August 2021 -- ADP data showed.
Most of the jobs added were in the services sector, such as in leisure and hospitality, or in trade, transportation and utilities.
Meanwhile, sectors like natural resources and mining, as well as information, lost roles.
"Overall, the data are pointing to some cooling in private job growth," said High Frequency Economics chief US economist Rubeela Farooqi.
She expects the labor market to cool further but for job growth to remain positive with a low unemployment rate.
Analysts warn that ADP figures may be revised, and all eyes are on the government employment report at the end of the week.
Observers will also be eyeing Fed Chair Jerome Powell's appearances on Capitol Hill this week, for indications on when the central bank could start lowering rates.
N.Wilson--SFF
