ADP Employment: Moderate Gains, Trend Accelerated

March 4, 2020
Bottom Line: ADP reported moderate job growth in February, led by gains in the service sector. January's tally, which was the strongest month in over 4 years, was revised lower (now 209k from 291k). Nonetheless, three- and six-month average job gains now stand at 186k and 159k, respectively, continuing to suggest a modest acceleration in labor market gains. This report, which does not include government workers, would suggest a slight upside risk to the 175k consensus for Friday's non-farm payroll report. ADP National Employment ROSE by 291k in January, compared with the consensus estimate for a gain of 157k. Meanwhile, the revisions to the prior 3 months subtracted 5k from the previous estimate. Over the past 12 months, private payrolls have increased by an average of 165k per month, lifting employment to 1.5% ABOVE its year ago level. Jobs in Goods-Producing Industries ROSE by 54k jobs as Manufacturing gained 10k workers. Moreover, Construction gained 47k jobs. Meanwhile, Service-Producing Industries ROSE by 237k jobs with Professional/Business Services hiring 49k workers, Trade/Transport/Utilities adding 8k, and Financial Activities increasing by 2k workers. Small Firms hired 94k workers, Medium-Sized Firms grew by 128k employees while Large Firms added 69k positions.