ADP Employment: Another Sharp Increase

Bottom Line: ADP reported another sharp increase in hiring in February with payrolls rising 298k, the most in nearly three years. There were also positive revisions to the prior months' data. ADP data do not account for government workers which are included in the Employment Situation headline number. This report would suggest upside risk to the 190k consensus for non-farm payroll growth to be reported Friday. According to ADP's data there were especially strong gains in goods producing industries with 66k new construction jobs and 32k manufacturing jobs. ADP National Employment ROSE by 298k in January, compared with market expectations for a gains of 187k. Meanwhile, the revisions to the prior 3 months added an additional 65k to the previous estimate. Over the past 12 months, private payrolls have increased by an average of 191k per month, lifting employment to 1.9% ABOVE its year ago level. Jobs in Goods-Producing Industries ROSE by 106k jobs but Manufacturing gained 32k workers. Moreover, Construction gained 66k jobs. Meanwhile, Service-Producing Industries ROSE by 193k jobs with Professional/Business Services hiring 66k workers, Trade/Transport/Utilities adding 9k, and Financial Activities increasing by 4k workers. Small Firms hired 104k workers, Medium-Sized Firms grew by 122k employees while Large Firms added 72k positions.