US private sector adds 235,000 jobs in February

Private sector employment in the US rose more than expected in February, according to data released by ADP on Wednesday.

Employers added 235,000 jobs versus expectations of a 195,000 gain. Meanwhile, the January total of jobs added was revised up from 234,000 to 244,000.

Small businesses with fewer than 50 employees added 68,000 jobs while medium businesses with between 50 and 499 employees added 87,000 jobs. Large companies with 500 or more employees recruited an extra 70,000 people.

The goods-producing sector added 37,000 jobs, with the majority of those in construction, while the service-providing sector recruited an extra 198,000 people. Within that, leisure and hospitality saw the biggest increase, of 50,000.

Mark Zandi, chief economist at Moody’s Analytics, said: "The job market is red hot and threatens to overheat. With government spending increases and tax cuts, growth is set to accelerate."

Ahu Yildirmaz, vice president and co-head of the ADP Research Institute, said: "The labour market continues to experience uninterrupted growth. We see persistent gains across most industries with leisure and hospitality and retail leading the way as consumer spending kicked up. At this pace of job growth employers will soon become hard-pressed to find qualified workers."

Ian Shepherdson, chief economist at Pantheon Macroeconomics, said: "Yet another solid increase, and a bit bigger than suggested by the surveys and hard macro data we use to forecast ADP. This implies that the third element of ADP's model, the employment data which ADP collects from firms which use its payroll processing services - were stronger then we expected. Feeding this back into our own payroll models suggests we need to nudge up our forecast for the official payroll number on Friday to 225K from our previous estimate, 200K.

"The labour force is expanding at barely half that pace, so the unemployment rate remains under strong downward pressure, and a 3-handle is just a matter of time."