U.S. February ADP Employment - Moderate gain, unclear if payrolls will be consistent
ADP’s February ADP estimate for private sector employment growth of 140k is close to if a little softer than market expectations, slightly above recent ADP trend but well below the last two non-farm payrolls. The data does not tell us much about Friday’s non-farm payroll, for which we expect a 200k rise (160k in the private sector).
ADP details show moderate gains in most components, leisure and hospitality at 41k being the strongest, while construction at 28k was also fairly strong. There were no significant negatives.
Wage data showed a 5.1% rise for job-stayers, the smallest since August 2021, but a 7.6% rise for job changers, the first acceleration since November 2022. The labor market still looks quite tight.
ADP underperformed payrolls by over 100k in December and January, and outperformed by over 100k in June and July, with data from August through November being reasonably consistent. In January 2023 ADP also saw a sharp underperformance. That was followed by a marginal outperformance in February 2023.
