The numbers: U.S. businesses added 475,000 new jobs in February, payroll processor ADP said, after omicron faded, governments eased pandemic restrictions and the economy perked up.
Economists surveyed by The Wall Street Journal had forecast a 400,000 increase.
ADP is a preview of sorts for the U.S. Labor Department’s broader employment survey that comes out a few days later. Yet the two reports have often been at odds during the pandemic and ADP has been far less reliable as a bellwether.
In January, for example, ADP originally reported a sharp 301,000 decline in employment owing to the record surge in coronavirus cases. Yet the government’s official report showed a sizable 467,000 gain in hiring.
Now ADP’s revisions to January show that employment rose by 509,000 instead of shrinking as originally reported.
On Friday, the official U.S. employment report is expected to show an increase of 440,000 new jobs in February.
Big picture: A recovering U.S. economy has a near record number of open jobs, but not enough people to fill them. Companies have nearly 11 million openings, or a record two jobs for every unemployed person.
Even sharply higher pay has not been enough to lure more people back into the workforce, however. Millions retired early, some are still caring for young kids or elderly relatives and others are too afraid of the virus to return to work, studies show.
The result: Many companies say they can’t obtain enough labor to keep up with demand — and that’s holding the recovery back.
Key details: Large firms generated 552,000 new jobs in February and mid-sized businesses added 18,000, offsetting a 96,000 decline among smaller companies.
The bulk of new jobs were created by hotels, restaurants, transportation companies and white-collar firms. Manufacturers also boosted employment by 30,000.
Looking ahead: “The broad-based 475,000 rise in the ADP measure of private payrolls in February adds to the string of releases suggesting that the economy is in good shape,” said U.S. economist Michael Pearce of Capital Economics.
“But quite frankly, with January’s 301,000 reported drop revised into a 509,000 gain, the ADP figures are as much noise than signal.”