U.S. private payrolls rose more than expected in February, pointing to continued strength in the labor market.
Private employment increased by 242,000 jobs last month, the ADP national employment report showed on Wednesday. January’s data was revised upwards to show 119,000 jobs added instead of the 106,000 previously reported. Economists polled by Reuters had forecast an increase of 200,000 jobs.
Federal Reserve Chairman Jerome Powell told lawmakers on Tuesday that the U.S. central bank is likely to raise interest rates more than expected and opened the door to a half-percentage-point hike this month to fight inflation, following a recent string of strong economic data.
Job growth was solid in January and the unemployment rate fell to 3.4%, its lowest level in 53 <>/<> years. Consumer spending recovered strongly and inflation picked up in January.
The ADP report, produced in conjunction with Stanford’s Digital Economy Lab, comes before the Department of Labor’s Bureau of Labor Statistics (BLS) releases the more comprehensive and monitored February jobs report on Friday.
It has not been a reliable indicator in the forecast of private payrolls in the BLS employment report. ADP initially reported the creation of 106,000 private jobs in January, a fraction of the 443,000 private payrolls increase estimated by the BLS.
“More broadly, in the months since ADP data began publishing with a new methodology, initial readings have not reliably predicted initial readings of related BLS data,” said Daniel Silver, an economist at JPMorgan (NYSE:.JPM) in New York.
According to a Reuters survey of economists, private payrolls likely increased by 213,000 jobs in February. Total nonfarm payrolls are forecast to have increased by 203,000 jobs last month, after rising 517,000 in January.