Private employers in the United States added only 77,000 jobs in February 2024, marking a sharp decline from January's revised figure of 186,000 and falling well short of economists' expectations of 148,000 new positions, according to ADP's monthly employment report released Wednesday.
The February numbers represent the smallest monthly gain since July, raising fresh concerns about potential economic slowdown. Annual wage growth held steady at 4.7%.
Several key sectors experienced job losses, with trade, transportation and utilities shedding 33,000 positions. Education and health services declined by 28,000 jobs, while information services dropped 14,000 positions amid uncertainty in AI-related industries.
However, some sectors showed resilience. Leisure and hospitality led gains with 41,000 new jobs, followed by professional and business services adding 27,000 positions. Financial activities and construction each contributed 26,000 jobs, while manufacturing grew by 18,000.
Large companies with 500+ employees drove the bulk of hiring, adding 37,000 jobs. In contrast, small businesses with fewer than 50 workers cut 12,000 positions.
"Policy uncertainty and reduced consumer spending may have triggered layoffs or hiring slowdowns last month," said Nela Richardson, ADP's chief economist. She noted that recent data points to employers showing hesitancy in hiring as they evaluate future economic conditions.
The report comes amid growing concerns about the impact of trade policies on economic growth and inflation. While most economic indicators remain positive, both business leaders and consumers have expressed increasing worry about potential price increases and slower growth resulting from tariff measures.
The ADP report serves as a preview to Friday's official Labor Department employment figures. Economists expect that report to show total job gains of 170,000 with unemployment holding at 4%.