Advertising jobs in a restaurant seems to attract workers to Oceanside, California, USA, May 10, 2021. REUTERS / Mike Blake
WASHINGTON, March 2 – Private employers in the United States hired more workers than expected in February, and data for the previous month were revised sharply higher to show strong job gains instead of losses, in line with other reports. who paint an optimistic picture of the labor market.
The national ADP employment report on Wednesday suggests that the economy is on a solid footing as the winter wave of COVID-19 infections caused by the Omicron variant subsides. But some economists have expressed concerns about the report’s credibility due to the sharp upward revision of January data.
Private wages rose 475,000 last month. Employers added 509,000 jobs in January, instead of laying off 301,000 workers, as originally reported. Economists polled by Reuters predicted that private wages would rise by 388,000 jobs.
“Huge audits undermine ADP’s credibility,” said Michael Pierce, a senior economist at Capital Economics in New York. “Honestly, with a reported decline of 301,000 in January, revised to a profit of 509,000, ADP figures are as much noise as signal.”
However, ADP chief economist Nela Richardson said the audits were part of the process, drawing parallels with the Labor Department’s Bureau of Labor Statistics, which compiles the closely monitored monthly employment report.
“If you look at the last three months, like November, December (data), the BLS has also significantly revised their numbers in 2021,” Richardson said. “I think the important thing to remember is the general trend. Both NER and BLS show more than 6 million jobs created in 2021. “
The ADP report was developed in conjunction with Moody’s Analytics and was published before the more comprehensive and closely monitored BLS employment report for February on Friday. He has poor records predicting the number of private salaries in the BLS employment report due to differences in methodology.
While the ADP’s initial estimate showed that private wages fell for the first time in a year in January, the BLS reported that the private sector had hired 444,000 workers, with major upward revisions to increase employment in November and December.
RELIABLE PREDICTOR
“The ADP report is not always a reliable predictor of BLS data, but it suggests that our expectations for Friday are quite reasonable,” said Daniel Silver, an economist at JPMorgan in New York.
According to the ADP report, large companies accounted for almost all profits in February, with small business employment down 96,000. Businesses continue to report difficulties in finding workers. At the end of December, there were almost a record 10.9 million vacancies.
Tightening labor market conditions are leading to higher inflationary pressures. Federal Reserve Chairman Jerome Powell told lawmakers on Wednesday that the US Federal Reserve would continue with plans to raise interest rates this month, but Russia’s war against Ukraine has made prospects “very uncertain”. Read more
Economists expect up to seven interest rate hikes this year. Shares of Wall Street traded higher. The dollar rose against a basket of currencies. US government bond prices have fallen.
“We expect small effects on the US labor market, but there are high risks of deterioration in the coming months,” said Gus Focher, chief economist at PNC Financial in Pittsburgh, Pennsylvania. “These include a recession in Europe, even higher inflation due to rising energy prices and the growing likelihood that the Fed will be forced to raise interest rates so aggressively to fight inflation that the recovery is stalled.
Indications are that the companies maintained a strong hiring rate in February. Data from Homebase, a payroll planning and tracking company, showed a significant increase in the number of employees and the number of hours worked in mid-February.
According to the UKG workforce activity report, shift work in February recorded its biggest monthly gain since the spring of 2020. The workforce management software company said the jump meant that the impact of COVID’s Omicron option 19 on the hourly shift is over.
This is in line with expectations for another month of solid profits in February. According to a study by Reuters economists, wages in the non-agricultural sector are likely to have increased by 400,000 jobs after rising by 467,000 in January. Private wages are projected to increase by 378,000 in February.
Report by Lucia Muticani; Edited by Chizu Nomiyama and Andrea Ritchie
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