Private employers added 217,000 jobs in February -- far more than expected -- payroll giant ADP (ADP) announced Wednesday. That's the fifth straight month of significant gains and additional evidence the U.S. job market continues to heal.
A Bloomberg survey had forecast private employers would add 180,000 jobs in February after adding a revised 189,000 in January, which slightly topped initial estimates of 187,000. The economy added 247,000 private sector jobs in December, 92,000 in November and 79,000 in October.
"This month's ADP National Employment Report suggests continued solid growth of nonfarm private employment early in 2011," ADP said. "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)."
The job gains were concentrated in the services sector and in small- to medium-size businesses. Small businesses added 100,000 jobs, midsize businesses added 104,000 and large businesses added 13,000.
Services added 202,000 jobs, manufacturing added 20,000 and the goods producers added 15,000. Employment growth in financial services, however, was flat. And the construction sector lost 9,000 jobs.
Mixed Signals as Layoffs Increase
Economists monitor monthly job reports because job creation is positively correlated with corporate revenue and earning gains. And, in general, the U.S. stock market tracks corporate earnings.
Separately, however, private placement firm Challenger, Gray & Christmas said layoff announcements by U.S. employers totaled 50,702 in February, up 32% from January, and up 20% from a year ago when they totaled 42,090, Reuters reported Wednesday. Even so, Challenger added that the pace of planned job-cutting remained subdued. For the first two months of 2011, layoffs totaled 89,211, down about 20% from 113,572 for the first two months of 2010.
While ADP's private employment survey isn't as comprehensive as the U.S. Labor Department's nonfarm monthly report, due out this Friday at 8:30 a.m. ET, it still provides evidence that employers are more confident about adding employees this year than at the beginning of 2010. That bodes well for at least a modest decline in the country's high 9% unemployment rate in 2011, assuming the period of large, public sector layoffs is over.
Still, it's important for investors to keep the five-month private sector job growth streak in perspective. America's job deficit is huge: The economy is short about 15 million full-time jobs, which means the nation will have to register strong employment growth over several years -- not months -- to return to a more reasonable unemployment rate around 6% to 7%.