American firms added many more employees in February than anticipated indicating the strong labor market performance continues to underpin the economy.
Private employment tracked by the payroll service company ADP rose 235,000 last month, and January's total was revised to 244,000 an increase of 10,000, according to the ADP Research Institute on Wednesday. Analysts had forecast 195,000 new positions.
February's three month moving average of 243,000,000 was the highest since July 2015. The report is based on ADP's payroll data which covers 411,000 companies with almost 24 million employees in the U.S.
The ADP numbers suggest a positive report from the Labor Department's monthly payroll statistics on Friday. The median estimate is that the economy created 200,000 new jobs in February, the same as in January. The unemployment rate probably dropped 0.1 percent to 4.0 percent.
These employment gains point to continued robust consumer spending which accounts for about 70 percent of U.S. GDP, especially when coupled with recent wage increases.
In January average hourly earnings rose 2.9 percent on the year, the best for this closely followed indicator since June 2009. The three month moving average of 2.7 percent is the strongest since July of that year.
Annual Average Hourly Earnings
Manufacturing jobs rose 37,000, services industries added 198,000 workers. Construction employment jumped 21,000 and professional and business services rose 46,000.
Jobs were distributed through the three company sizes charted by ADP: large firms of more than 500 employees added 70,000; medium sized companies with 50 to 499 workers added 97,000 and small firms increased by 68,000.
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