The US labor market may be showing signs of fatigue, according to the latest ADP National Employment Report, which revealed a significant slowdown in private payrolls growth during February.
The report, released on Wednesday, indicates a potentially concerning trend as the economy navigates a landscape of ongoing uncertainties.
The ADP National Employment Report showed private payrolls increased by only 77,000 jobs last month, after an upwardly revised 186,000 gain in January.
This figure fell well short of economists’ expectations, who had forecast private employment rising by 140,000 following a previously reported 183,000 advance in January.
The ADP report, jointly developed with the Stanford Digital Economy Lab, provides a preliminary snapshot of the labor market ahead of the more comprehensive data released by the government.
However, it’s important to note that, as the article indicated, there is no clear correlation between the ADP and BLS employment reports.
The labor department’s report on Friday
The ADP report was published ahead of Friday’s more comprehensive and closely watched employment report for February from the Labor Department’s Bureau of Labor Statistics.
This official report is expected to provide a more detailed picture of the overall employment situation, including both private and public sector jobs.
A Reuters survey of economists suggests that private payrolls likely increased by 142,000 jobs in February, as the drag of unseasonably cold temperatures faded.
For context, private employment rose 111,000 in January, according to this same survey.
Furthermore, mass layoffs of federal workers, mostly on probation and with the United States Agency for International Development, are not expected to show in February’s employment report as the purges happened outside the payrolls survey week.
Economists estimate overall nonfarm payrolls are estimated to have increased by 160,000 jobs after rising 143,000 in January.
Economists are forecasting the unemployment rate to remain unchanged at 4.0%.
While the ADP report raises some concerns about the health of the labor market, Friday’s official report from the Bureau of Labor Statistics will offer a more definitive assessment.
Investors, policymakers, and economists will be closely scrutinizing the data to gain a clearer understanding of the US economic trajectory.
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