Private sector job growth rises less than expected in February: ADP

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U.S. Bank Wealth Management senior vice president Lisa Erickson looks ahead to this week's retail earnings and Fed Chair Powell's testimony on Capitol Hill.

Hiring by U.S. companies continued to chug along at a healthy pace in February, although growth came in below expectations, according to the ADP National Employment Report released Wednesday morning.

Companies added 140,000 jobs last month, missing the 150,000 gain that economists surveyed by Refinitiv predicted but up from the revised 111,000 figure in January.

Wall Street is watching the labor market closely for signs that it is finally slowing down and the Federal Reserve can pivot to cutting interest rates.

The leisure and hospitality sector accounted for the most job gains in February, with the industry onboarding 41,000 new workers. There were also substantial hiring gains in construction (28,000), transportation and utilities (24,000), financial activities (17,000) and other services (14,000).

WORKERS NOW DEMANDING NEARLY $80K TO START NEW JOB

Workers replace power lines in Monterey Park, California, on Oct. 6, 2023. (Frederic J. Brown/AFP via Getty Images / Getty Images)

In a welcoming sign for the Federal Reserve, wage growth continued to shrink in February. Annual pay rose 5.1% last month, the smallest increase since August 2021, according to the report. However, for workers who switched jobs, wages climbed 7.6%, the first increase since November 2022.

POWELL SAYS FED WON'T RUSH TO CUT INTEREST RATES UNTIL INFLATION IS CONQUERED

«Job gains remain solid. Pay gains are trending lower but are still above inflation,» said ADP chief economist Nela Richardson. «In short, the labor market is dynamic, but doesn’t tip the scales in terms of a Fed rate decision