WASHINGTON, March 4, 2026, 12:34 EST
- Private-sector payrolls grew by 63,000 in February, according to ADP. The group also cut its January figure down to just 11,000.
- Most of the hiring showed up in education/health and construction. Professional services, on the other hand, shed jobs.
- Pay gains for workers who stayed in their jobs stuck at 4.5%, while those switching roles saw pay growth slip to 6.3%.
U.S. private sector payrolls climbed by 63,000 in February, marking the strongest monthly jump since July, according to Wednesday’s ADP National Employment Report. January figures, though, were revised lower—down to 11,000 from an initial 22,000. Economists surveyed by Reuters had been looking for a 50,000-job gain last month.
It’s a tough spot for the Federal Reserve. The next policy meeting lands March 17-18, with rates stuck at 3.50%-3.75%. Now, officials have to contend with a new oil-driven inflation threat, just as hiring momentum has faded. “It will feed into headline inflation,” Fed Governor Stephen Miran acknowledged, but he pushed back on broader concerns: “evidence that it feeds into core inflation … is quite limited.” Reuters
Minneapolis Fed President Neel Kashkari offered a more somber assessment, stressing that policymakers still need additional data to gauge “how long is the effect, and how big is the effect” tied to the Iran war. Reuters
Hiring popped up in just a few corners. Education and health services put up a gain of 58,000 jobs; construction tacked on 19,000. But professional and business services—a big category for white-collar roles—dropped 30,000, according to ADP’s report. Manufacturers cut 5,000 positions. Information managed an 11,000-job uptick.
It was small businesses that led the way: employers with 1-19 staff picked up 58,000 jobs. Mid-sized firms shed 7,000 roles, while the biggest companies—those with 500 or more workers—added just 10,000. The numbers are based on anonymized payroll data from over 26 million private-sector employees. Breaking it down geographically, the South posted a gain of 37,000 jobs; the Midwest slipped by 4,000.
Pay trends held up better than the hiring numbers. “We’ve seen an increase in hiring and pay gains remain solid, especially for job-stayers,” said ADP Chief Economist Nela Richardson. She flagged that most of the hiring was clustered, and noted the pay premium for switching employers dropped to a record low in February. ADP Employment Reports
ADP reported job-stayer pay growth holding steady at 4.5% in February versus the prior year, matching January’s pace. Pay bumps for job-changers slipped to 6.3%, a notch down from 6.4%, according to Fox Business.
The government’s nonfarm payrolls report drops Friday, putting the spotlight on broader job growth numbers outside farming. ADP’s figures don’t always line up with that report. According to a Reuters poll, analysts are looking for a 59,000-job gain in nonfarm payrolls for February, with private payrolls seen climbing by 65,000. Unemployment? Expected to hold at 4.3%.
The downside isn’t hard to see. ADP’s revisions came in hefty, with most of the growth stacked in just a few sectors. If business services stumble again or mid-sized companies rein in hiring, the official numbers could slip. Tariffs and war worries aren’t helping; when plans stay conservative, payrolls feel it.
Fed officials are balancing inflation concerns as energy prices climb once more. “Nobody can be sure how long this will last,” New York Fed President John Williams said, calling the initial impact on financial markets muted. Reuters
