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ADP Employment: Slower Gains

March 3, 2021
Bottom Line:   Revised up slightly for January, ADP reported slower job gains in February. As reopenings continued in many parts of the country, service-producing jobs gained modestly.   In many parts of the country, harsh weather hindered construction activity, causing modest job losses in both construction and manufacturing.   Overall, this report left cause for concern as the recovery remains tepid in the labor market.   The consensus for the non-farm payroll report due Friday morning is 195k -- and this report suggests the potential for a slight downside miss.
ADP National Employment ROSE by 117k in February, compared with the consensus estimate for a gain of 205k.  Meanwhile, the revisions to the prior 3 months added an additional 26k to the previous estimate. Over the past 12 months, private payrolls have decreased by an average of -800k per month, lifting employment to 7.4% BELOW its year-ago level.
Jobs in Goods-Producing Industries
FELL by 14k jobs but Manufacturing lost 14k workers. Moreover, Construction lost 3k jobs.
Service-Producing Industries
ROSE by 131k jobs with Professional/Business Services hiring 22k workers, Trade/Transport/Utilities adding 48k, and Financial Activities remaining unchanged.
Small Firms hired 32k workers, Medium-Sized Firms grew by 57k employees while Large Firms added 28k positions.