WASHINGTON, March 4 - Private-sector employment in the United States expanded by 63,000 jobs in February, according to the ADP national employment report released Wednesday. The report also revised January's private payrolls sharply lower to an 11,000 gain, a significant reduction from earlier figures.
The ADP release, prepared in collaboration with the Stanford Digital Economy Lab, arrived ahead of the Bureau of Labor Statistics’ more comprehensive employment report for February, which is due on Friday. ADP’s monthly estimate has historically been a poor predictor of the BLS private payrolls number.
Economists surveyed by Reuters had expected private employment to rise by 50,000 in February, following what had been reported as a 22,000 increase in January before the revision. Separately, a Reuters poll of economists projected nonfarm payrolls likely increased by 59,000 jobs in February after a 130,000 gain in January. That same survey forecast private payrolls to rise by 65,000 in February, after a previously reported 172,000 advance in January, and anticipated the unemployment rate to remain at 4.3 percent.
Analysts say the labor market has shown signs of stabilization after a period of volatility last year that economists attributed in part to uncertainty tied to import tariffs. In a recent judicial ruling, the U.S. Supreme Court struck down a broad set of tariffs imposed under a statute intended for national emergencies. In response, the administration implemented a 10 percent global tariff for 150 days to replace some of those emergency duties, and later indicated those duties would be raised to 15 percent.
Persistently high inflation, together with the current stability in hiring, is considered a factor encouraging the Federal Reserve to hold interest rates steady this month. The Fed in January kept its benchmark overnight rate in a 3.50 percent to 3.75 percent range.
Geopolitical developments in the Middle East have also influenced market expectations. The U.S.-Israeli air campaign against Iran and retaliatory actions by Tehran have contributed to upward pressure on oil and natural gas prices. Higher energy costs have led traders to pare back expectations for rate cuts this year amid concerns that the conflict could rekindle inflation pressures. As a result, the likelihood of a rate cut in June has diminished significantly.
With the ADP report providing an early snapshot of private employment, market participants will look to the BLS release for a more complete picture of payrolls, unemployment and broader labor-market trends that feed into monetary policy considerations.