Mother Nature is again being blamed for slow job growth, following this morning’s release of new job estimates that are among the lowest in months.
ADP’s National Employment Report says the economy added a meager 139,000 new private sector jobs in February, well below the 155,000 to 160,000 consensus estimates of labor analysts.
The report, which included annual revisions to previous ADPs reports, adjusted January’s private sector numbers to 127,000 from an initial 175,000.
Mark Zandi, chief economist of Moody’s Analytics, said, “February was another soft month for the job market. Employment was weak across a number of industries. Bad winter weather, especially in mid-month, weighed on payrolls. Job growth is expected to improve with warmer temperatures.”
Construction, which would seem to be most sensitive to brutal weather, actually added 14,000 jobs, down from January’s 17,000, but still nearly as strong as for the same, though much milder winter months last year. However. with weather the major cause of January’s 16 percent drop in housing starts, the impact on construction hiring may be more visible when the March report comes out early next month.
The report also said the professional and business services sector added 33,000 jobs, and trade/transportation/utilities added 31,000 jobs. Both sectors have shown softer hiring in the last few months than they have for most of the previous year.
Derived from ADP’s 24 million worker payroll processing and computed by Moody’s Analytics, the report is considered an early preview of the official government employment and labor report coming Friday. The numbers rarely jibe due to the different ways data is collected. The government relies on surveys.
“This report provides some further confirmation of our expectation for a very weak showing in Friday’s employment report as a result of the reference period for payrolls coinciding with the last snow storm,” Millan Mulraine, deputy chief economist at TD Securities in New York, told Reuters.
“We continue to believe that the underlying momentum in the economy remains favorable, and we look for the pace of employment growth to rebound meaningfully in the coming months.”
ADP’s revised January job counts bring them more in line with the U.S. Labor Department’s 142,000 new private sector job count. Including counts of government jobs, which have generally been declining over the last few year, January’s job growth netted out to 113,000 total new non-farm jobs.
February’s report from the Bureau of Labor Statistics is expected to show about 150,000 new jobs during the month. The estimate for private sector jobs only is 154,000, according to Bloomberg News.
ADP said small businesses were the biggest driver of job growth, with firms of fewer than 50 employees adding 59,000 jobs. The largest firms, with more than 1,000 workers, added 43,000 jobs. The service sector accounted, as it always does, for the largest number of jobs, growing by 120,000. The only sector to lose jobs was financial activities, down by 1,000.