US Private Payrolls up 63,000 in February, Highest Since July: ADP

Private-sector employment rose more than expected in February, signaling a potential hiring rebound that could thaw the frozen labor market.

Companies added 63,000 new jobs last month, from January’s downwardly revised 11,000, according to new data from payroll processor ADP released on March 4.

February’s increase was the best monthly performance since July 2025.

The consensus forecast was 50,000.

Education and health care services led the job creation, adding 58,000 new positions. This was followed by construction (19,000) and information services (11,000).

Conversely, professional and business services eliminated 30,000 jobs, and manufacturing shed 5,000 positions.

Annual wage growth for job-stayers was flat, at 4.5 percent. Pay gains for job-changers slowed to 6.3 percent on a 12-month basis.

“We’ve seen an increase in hiring and pay gains remain solid, especially for job-stayers,” Nela Richardson, chief economist at ADP, said in a statement.

“But with hiring concentrated in only a few sectors, our data shows no widespread pay benefit from changing jobs. In fact, the pay premium for switching employers hit a record low in February.”

ADP’s earnings data contrast with other figures that suggest wage growth for job-switchers has been rising.

“With low immigration and strong tailwinds to growth from [artificial intelligence] spending, the industrial renaissance and the One Big Beautiful Bill, it is not a surprise that wage growth is rising for job switchers,” Torsten Slok, chief economist at Apollo Wealth Management, said in a note emailed to The Epoch Times.

Meanwhile, small businesses—those with fewer than 50 employees—accounted for the bulk of the employment gains, adding 60,000 jobs.

Large establishments with more than 500 employees increased their payrolls by 10,000. Employment at mid-sized businesses—headcount ranging between 50 and 499—fell by 7,000.

The next batch of employment data will be released on March 5.

Global outplacement firm Challenger, Gray & Christmas will release planned job cuts from U.S. businesses. The Department of Labor will publish weekly jobless claims.

‘Coin Flip’

The labor market has slowed considerably over the past several months. But although hiring has cooled off, layoffs have not been ubiquitous; economic observers have described the current environment as a “low fire, low hire” climate.

Recent indicators have revived optimism that the labor market could be warming up.

In January, the U.S. economy added 130,000 new jobs, higher than economists’ expectations.

The employment index of the Institute for Supply Management’s purchasing managers’ index—a monthly survey of the industry’s prevailing economic direction—climbed for the third consecutive month in February.

Job postings on Indeed also jumped to a two-month high.

The week’s main event will be on March 6, when the February jobs report is released. Economists are penciling in 60,000 new jobs and an unemployment rate holding steady at 4.3 percent.

For investors, it could be a challenging nonfarm payrolls report to comb through, according to Jay Woods, chief market strategist at Freedom Capital Markets.

“If we see a spike in the unemployment numbers, it may bode well for those in the rate-cutting camp, but cause a fear that there are bigger issues to deal with in the labor market,” Woods said in a note emailed to The Epoch Times. “A number that is lower than expectations, coupled with rising inflation, gives the Fed less ammo to rationally cut rates.”

Investors widely expect the Federal Reserve to leave interest rates unchanged when monetary policymakers of the Federal Open Market Committee (FOMC) convene their two-day policy meeting later this month.

The futures market is not signaling any rate action until June or July, according to the CME FedWatch Tool.

Even Federal Reserve board member Christopher Waller, who has been advocating interest rate cuts since this past spring, indicated that interest rates could remain on hold if the labor market is bouncing back. But his support for a rate cut or leaving the benchmark federal funds rate unchanged depends on what the February data show.

For now, it is a “coin flip,” Waller said.

“If the good labor market news of January is revised away or evaporates in February, it would support my position at the FOMC’s last meeting, that a 25 basis-point reduction in the policy rate was appropriate, and that such a cut should be made at the March meeting,” Waller said in a Feb. 23 speech at the National Association for Business Economics.

The central bank will also release updates to its Summary of Economic Projections, a periodical summary of officials’ expectations for policy and the economy.

By the time the FOMC completes its meeting on March 17–18, officials will have digested a tranche of employment news, a batch of inflation updates, and consumer data.