Private sector job creation slowed significantly in February 2025, with only 77,000 new jobs added, according to a report from payroll processing firm ADP. This figure is a stark decline from the revised 186,000 jobs created in January and falls short of the Dow Jones estimate of 148,000.
- Private sector job creation slowed significantly.
- February added only 77,000 new jobs.
- Concerns rise over economic slowdown risks.
- Tariff plans may trigger inflation worries.
- Employment growth favored large firms.
- Upcoming Labor Department report expected Friday.
The slowdown in job creation comes at a time when economic growth concerns are mounting, particularly regarding the potential impact of President Trump’s tariff policies. The ADP report indicates that annual pay rose by 4.7% in February, consistent with the previous month. However, the smaller job increase is the lowest since July 2024, raising alarms about a possible economic downturn.
Key statistics from the ADP report include:
- Loss of 33,000 jobs in trade, transportation, and utilities.
- Decline of 28,000 jobs in education and health services.
- Decrease of 14,000 jobs in information services.
Conversely, sectors such as leisure and hospitality saw a gain of 41,000 jobs, while professional and business services added 27,000 jobs. Additionally, construction and financial activities each reported an increase of 25,000 jobs, with manufacturing contributing 18,000 jobs despite a broader trend of reduced hiring in the sector.
Employment growth was notably skewed towards larger firms, with companies employing 500 or more workers adding 37,000 jobs, while those with fewer than 50 employees lost 12,000 jobs. The ADP report serves as a precursor to the Labor Department’s Bureau of Labor Statistics report on nonfarm payrolls, which is expected to show job gains of 170,000 and maintain an unemployment rate of 4%.
The February ADP jobs report highlights a concerning trend in U.S. job creation, with significant declines in several sectors. As businesses navigate policy uncertainty and changing economic conditions, the outlook for future job growth remains uncertain.
