Surge in February US Job Creation Says ADP Report

Marcus Newton
March 9, 2017

Jobs were added to an erupting stride in February, with a remarkable turn away from the service-sector positions that have led hiring for years, according to a report Wednesday. Economists expect a nonfarm payroll gain of 195,000 after January's 227,000.

"Taken literally, the data suggest significant upside risk to the employment report on Friday", said Jim O'Sullivan, chief US economist at High Frequency Economics in Valhalla, New York.

USA stocks were set to open little changed on Wednesday after a better-than-expected private sector hiring pointed to a healthy labor market, making an interest rate increase by the Federal Reserve next week near certain. The gain was well above economists' expectations for a 190,000 increase. "However, ADP is far from infallible for signaling the more volatile payrolls data". The White House will certainly advance that argument after seeing today's ADP report on job growth in February, Trump's first full month as president, and ADP's analyst gives them some ammunition for that claim. The unemployment rate is forecast edging down to 4.7 percent from 4.8 percent in January. The Fed raised its benchmark overnight rate in December and has forecast three rate increases for 2017. "Tightening financial conditions and further rises in uncertainty could trigger a significant slowdown in US, but also global growth". Unit labor costs rose by 1.7%, as previously reported. February's 1.9% annual increase is still near the lower end of the year-over-year pace that's prevailed in recent history, but it appears that the slowdown in the labor market has ended.

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The ADP and official government jobs report don't always line up month to month, and hiring trends early in the year are often distorted by weather.

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Reuters reports that Trump intends to boost the country's economic growth to 4 percent.

Crude for April delivery plunged $2.86 to $50.28 a barrel following the release of a report showing a substantial increase in crude oil inventories last week.

The Dow Jones Industrial Average fell 2.73 points, or 0.01 per cent, to 20,951.61.

People walk past a "Now Hiring" sign in Manhattan in New York City, U.S., May 10, 2016.

Other reports by MaliBehiribAe

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