ADP: Businesses Added 198,000 Jobs In February

08 Mar 2013

Business added 198,000 jobs in February, payroll processor ADP said Wednesday, as the labor market continued to show resilience despite the threat of sharp federal budget cuts that are expected to slow economic growth.

The report gave a lift to U.S. stock index futures.

Economists had forecast that ADP would report 173,000 job gains for last month.

Trade and transportation led job gains, with 45,000, followed by professional and business services, with 35,000. Construction added 21,000 jobs and manufacturing 9,000.

For the second consecutive month, small and midsize businesses accounted for most of the job gains. Small businesses added 77,000 jobs, midsize ones 65,000, and large companies 57,000.

"The job market remains sturdy in the face of significant headwinds," says Mark Zandi, chief, chief economist of Moody's Analytics. "Tax increases and government spending cuts don't appear to be affecting the job market."

The ADP report is closely read as a possible preview of the Labor Department's February employment survey coming Friday. But while ADP captures broad trends in the job market, it has had mixed success in foreshadowing the Labor Department's monthly employment report.

For example, ADP projected the private sector added 192,000 jobs in January, while Labor's estimate was 166,000. Total payroll additions in January were 157,000, as federal, state and local governments cut 9,000 jobs.

The economy has yet to show significant effects from business and consumer uncertainty about $85 billion in across-the-board federal spending cuts that started to take effect March 1. Measures of manufacturing and service-sector activity both increased in February, although an index of service employment fell slightly.

Economists' consensus forecast for the government's report on Friday is for overall job gains of 155,000 last month — compared with an increase of 157,000 in January — and the same unemployment rate of 7.9%.

Source: http://www.usatoday.com/story/money/business/2013/03/06/adp-report-february/1965987/