Dr. Gleb Tsipursky – The Office Whisperer
Nirit Cohen – WorkFutures
Angela Howard – Culture Expert
Drew Jones – Design & Innovation
Jonathan Price – CRE & Flex Expert
U.S. private payrolls increased at the slowest pace in seven months in February, blamed on policy uncertainty, likely related to tariffs on imported goods, and slowing consumer spending.
The ADP National Employment Report on Wednesday also showed a moderation in wage growth for workers changing jobs. Wage gains for employees remaining in their jobs were steady. While the report probably exaggerates the labor market slowdown, it aligned with consumers’ deteriorating views of the jobs market.
Tariffs either already implemented or being pursued by President Donald Trump’s administration have caused anxiety among businesses and consumers, leading to a decline in sentiment that has erased all the gains booked following the Republican’s election victory in November.
“Policy uncertainty and a slowdown in consumer spending might have led to layoffs or a slowdown in hiring last month,” said Nela Richardson, chief economist at ADP.
“Our data, combined with other recent indicators, suggests a hiring hesitancy among employers as they assess the economic climate ahead.”
Private payrolls increased by only 77,000 jobs last month, the smallest rise since July 2024, after an upwardly revised 186,000 gain in January. Economists polled by Reuters had forecast private employment rising 140,000 following a previously reported 183,000 advance in January.
There were job losses in the trade and transportation, healthcare, education and information sectors. Small business employment also fell. Construction added 26,000 jobs, while manufacturing employment increased by 18,000 positions. Leisure and hospitality payrolls rose by 41,000 positions.
Wages for workers changing jobs advanced 6.7% year-on-year in February after climbing 6.8% in January. They were unchanged at 4.7% for employees remaining in their jobs.
A Conference Board survey last week showed the share of consumers who viewed jobs as being “plentiful” dropped to a five-month low in February.
The ADP report, jointly developed with the Stanford Digital Economy Lab, was published ahead of Friday’s more comprehensive and closely watched employment report for February from the Labor Department’s Bureau of Labor Statistics. There is no correlation between the ADP and BLS employment report.
Private payrolls likely increased by 142,000 jobs in February, a Reuters survey showed, as the drag of unseasonably cold temperatures faded. Private employment rose 111,000 in January. Mass layoffs of federal workers, mostly those on probation and with the United States Agency for International Development, are not expected to show up in February’s employment report as the purges happened outside the payrolls survey week.
But hiring and funding freezes could have an impact on government and contractor employment.
More stories for you
Overall nonfarm payrolls are estimated to have increased by 160,000 jobs after rising 143,000 in January. The unemployment rate is forecast unchanged at 4.0%.
(Reporting by Lucia Mutikani; Editing by Chizu Nomiyama and Andrea Ricci)
