The recent ADP National Employment Report reveals that private sector employment increased by 77,000 jobs in February 2025, marking the smallest gain since July 2024 and falling significantly short of the anticipated 140,000 jobs.
Sector-Specific Performance:
• Goods-Producing Sector: Added 42,000 jobs, with construction contributing 26,000 and manufacturing 18,000.
• Service-Providing Sector: Gained 36,000 jobs. Notably:
o Leisure and Hospitality: Increased by 41,000 jobs.
o Professional and Business Services: Added 27,000 jobs.
o Trade, Transportation, and Utilities: Decreased by 33,000 jobs.
o Education and Health Services: Declined by 28,000 jobs.
o Information Sector: Reduced by 14,000 jobs.
Implications for Unemployment Rates:
Given this slowdown, the unemployment rates for February 2025 are projected as follows:
• Overall U.S. Unemployment Rate: Expected to rise from 4.0% in January to 4.2%.
• Black Unemployment Rate: Projected to increase from 6.4% to 6.8%.
• Hispanic Unemployment Rate: Expected to rise from 5.5% to 5.7%.
• Asian Unemployment Rate: Anticipated to increase from 3.8% to 3.9%.
Analysis:
The modest job gains in February, coupled with sector-specific losses, suggest a deceleration in labor market momentum. This trend aligns with the projected uptick in unemployment rates across various demographics. The increases among Black, Hispanic, and Asian populations could indicate heightened vulnerabilities to economic fluctuations.
U.S. Private Payrolls Experience Sharp Slowdown in February: https://cnb.cx/4i9SqPq