New York City, NY – Private sector job growth took a significant hit in February, according to a report released by payrolls processing firm ADP. The report revealed that a mere 77,000 new jobs were added during the month, a sharp decline from the previous month’s figure of 186,000. This unexpected slowdown in job creation has raised concerns about a possible economic downturn, especially amidst uncertainties surrounding President Donald Trump’s tariff policies.
Along with the sluggish job growth, worries about a potential economic slowdown have been fueled by fears of inflation triggered by the tariff plans. Reports indicate that there was a 4.7% increase in annual pay in February, a figure consistent with the previous month. The release of the ADP report led to a decrease in stock market futures and mixed Treasury yields, signaling investor unease about the economic outlook.
ADP chief economist Nela Richardson attributed the lackluster job growth to policy uncertainty and a possible decrease in consumer spending. Richardson pointed out that recent data, along with other indicators, suggest that employers are hesitant to hire as they navigate the current economic landscape. Despite overall positive economic data, there has been a noticeable increase in concerns among both business leaders and consumers about the potential impact of Trump’s tariffs on prices and economic growth.
The report revealed specific sectors that experienced job losses, including trade, transportation, and utility jobs, which saw a decline of 33,000 positions. In contrast, leisure and hospitality jobs saw a significant increase of 41,000, indicating a mixed outlook for different industries. Large firms, particularly those employing 500 or more workers, reported gains in job creation, while smaller companies with fewer than 50 employees saw a decrease in employment.
The ADP report is seen as a precursor to the upcoming Labor Department Bureau of Labor Statistics report on nonfarm payrolls, scheduled for release on Friday. Economists are anticipating job gains of 170,000 in the upcoming report, with an expected steady unemployment rate of 4%. However, it is important to note that the two reports often differ due to varying methodologies, as seen in the significant disparity in private payroll numbers reported in January.
Overall, the latest ADP report underscores the complex challenges facing the economy, with uncertainties surrounding trade policies, consumer spending, and overall economic growth. The upcoming Labor Department report will provide further insights into the state of the job market and offer valuable information for policymakers and industry professionals.