Companies increased their hiring in February, shoring up expectations that the labor market’s recovery has moved into a higher gear.
Separate data on Wednesday showed wages grew much more quickly at the end of last year than originally estimated, good news for consumers, but a potential inflation problem for the Federal Reserve.
The private sector added 216,000 jobs last month, according to the ADP National Employment Report, topping economists’ expectations for a gain of 208,000.
The ADP figures come ahead of the government’s more comprehensive monthly labor market report on Friday, which includes both public- and private-sector employment.
“After two years of expansion without much gain in employment, we’re finally hitting the point where firms need to begin adding people in order to meet increased orders,” said Steve Blitz, senior economist at ITG Investment Research in New York. “There are still risks ahead, but if you could just stop the clock right where we are now, you’ve got a recovery that is gathering some momentum; it appears to be self-reinforcing.”
Economists polled by Reuters expect Friday’s report to show a gain of 210,000 in nonfarm payrolls, with a gain in the private sector of 225,000 jobs offsetting a modest decline in government jobs.
Economists often refer to the ADP report to fine-tune their expectations for the payrolls numbers, though it is not always accurate in predicting the outcome.
Daniel Silver, an economist at JPMorgan, noted that in the month of February in recent years, the difference between the two reports has been smaller and missed only by 2,000 in 2010 and 5,000 in 2011.
