By Anneken Tappe, CNN Business
America’s companies added 475,000 jobs last month, the ADP employment report said on Wednesday.
That was nearly 90,000 more positions than economists had expected and a sharp reversal from January, when ADP initially posted a surprise drop in jobs.
But the better-than-expected February numbers took a backseat to some significant revisions of the previous months.
Following in the footsteps of the Labor Department, ADP revised and benchmarked its numbers for 2021, said ADP chief economist Nela Richardson on a press call on Wednesday.
The surprising decline of 301,000 jobs initially reported for January, for example, was revised to an increase of 509,000 jobs. The update was massive, but it wasn’t down to ADP getting the numbers wrong at first.
With those revisions, the February jobs gain was actually the weakest since August, despite beating expectations.
“You’re seeing it in all data that the tremendous upheaval and swings in the early days of the pandemic will have an impact on measurements and seasonal adjustments,” Richardson told CNN Business. That’s why the revisions in economic models are so huge at the moment.
But rather than losing faith in economists’ ability to forecast, we must keep perspective, Richardson urged: “What it requires is that we focus on trend changes rather than one month or one data point,” she said.
Last year, the US economy still added more than six million jobs and 2022 is expected to be another strong year for the labor market as employers continue to struggle with a shortage of workers.
Weekly jobless claims are back at levels that were common before the pandemic, reflecting that businesses are reluctant to lay workers off, Richardson added.
In February, the leisure and hospitality sector added by far the most positions, at 170,000. None of the major sectors lost jobs, though growth was low in education as well as mining.
By business size, large companies with more than 1,000 employees added the most staff, while small businesses with up to 49 workers shed jobs.
The ADP report tracks private sector employment and isn’t correlated to the government’s official jobs tally, which is due Friday morning. Economists polled by Refinitiv forecast 400,000 jobs for the government report. Even so, the private payrolls report is closely watched and considered a bellwether for America’s labor market.
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