If today’s employment report from payroll processor ADP is any indication, February was a good month for hiring. A very good month.
The 217,000 private sector jobs that ADP says were added during the shortest month of the year was the largest increase reported by the company since November 2006.
Based on ADP’s payroll data and compiled by Macroeconomic Advisers, the monthly Employment Report is considered a harbinger of the official Labor Department report that will be released Friday. While the two reports use different methodology and the government report includes public sector employment, the ADP report offers economists an early look at the employment trend.
Economists had been expecting the ADP report to show an increase of 170,000 to 180,000. Estimates for the government report from the U.S. Bureau of Labor Statistics average 200,000 more jobs in February, according to a survey by Dow Jones Newswires.
The service sector accounted for 202,000 of the February growth. Small and mid-sized employers (up to 500 employees) added most of the jobs. Of the total, employers with more than 500 workers added only 13,000 to their payroll. Manufacturing added 20,000 jobs.
Overall, said ADP, “The recent pattern of rising employment gains since the middle of last year was reinforced by today’s report, as the average gain from December through February (217,000) is well above the average gain over the prior six months (63,000).”
Despite the strong ADP report, and an equally robust report Tuesday on manufacturing sector activity from the Institute for Supply Management, economists are still hesitant in their optimism. In his testimony before Congress yesterday, Federal Reserve Chairman Ben Bernanke said there are “grounds for optimism,” but added, “until we see a sustained period of stronger job creation, we cannot consider the recovery to be truly established.”
As if to underscore that caution, global outplacement consultancy Challenger, Gray & Christmas reported that planned layoffs increased in February for the second month in a row. The 50,702 job cuts announced last month was up 32 percent from January’s 38,519, and was the highest since March.
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“It is too soon to say whether the increases in January and now February represent a trend. Certainly the specter of rising gas prices could impact employers’ staffing decisions over the next six months. At the very least, rising energy costs could force employers to postpone hiring plans. At worse, increased costs could kill the fragile recovery and spur another round of layoffs,” said CEO John A. Challenger.
Bernanke, too, warned that rising oil prices could impinge the recovery, though as conditions are now, any effect was likely to be temporary.
Though it’s too soon to say what impact the Mideast turmoil will have on hiring, The Conference Board reported today that online job postings were down slightly in February. The Board’s Help Wanted OnLine Data Series tracks online job postings in the U.S., reporting the total number of listings as well as new posts.
A second, similar index, compiled by Monster — the Monster Employment Index — is to be released tomorrow.
At ERE’s Expo later this month, panelists will discuss the outlook for recruiting jobs this year, and detail how to use data from the BLS, and other organizations and groups to project hiring needs and labor availability.