Private sector job growth took a sharp downturn in February, as employers added just 77,000 jobs, according to the latest ADP National Employment Report. The figure fell far short of expectations and marked the weakest month of hiring since July 2024.
Why It Matters: The slowdown in hiring signals growing economic uncertainty, with policy concerns and weaker consumer spending weighing on business decisions. The report adds to a growing pile of data suggesting a cooling labor market.
By The Numbers: Leisure and hospitality led the way with 41,000 new jobs, accounting for more than half of February’s gains. Professional and business services added 27,000 jobs, while financial activities and construction followed closely, each adding 26,000 jobs.
- On the flip side, The biggest decline came from trade, transportation, and utilities, which shed 33,000 jobs.
- Education and health services lost 28,000 jobs, while the information sector saw a decline of 14,000.
Regional Breakdown: The South lost 12,000 jobs, but it wasn’t the hardest-hit region. The West led job losses, shedding 27,000 jobs in February.
- The Midwest and Northeast were nearly identical in job creation, with 56,000 and 55,000 jobs added, respectively.
What They’re Saying: Nela Richardson, ADP’s chief economist, noted that policy uncertainty and a slowdown in consumer spending might have led to layoffs or a slowdown in hiring last month. She also noted that their data, combined with other recent indicators, “suggests a hiring hesitancy among employers as they assess the economic climate ahead.”
Bottom Line: With government spending cuts and mounting business uncertainty, the economy appears to be losing momentum. Employers are cautious, and a broader slowdown may be on the horizon.