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Jobs report: ADP says businesses added 235,000 private sector jobs in February

Businesses added 235,000 jobs in February, payroll processor ADP says. Economists had expected gains of 200,000.
Credit: Justin Sullivan/Getty Images
Job seekers wait in line to enter the San Francisco Hire Event job fair on November 9, 2011 in San Francisco, California.

The job market is hot, and could get hotter.

Businesses added 235,000 jobs in February, payroll processor ADP said Wednesday, more than the 200,000 gains economists had expected.

That could possibly signal that a key employment report from the government will reveal more signs of strong hiring later this week.

“The job market is red hot and threatens to overheat,” said Mark Zandi, chief economist of Moody’s Analytics, which helps ADP compile the report. “With government spending increases and tax cuts, growth is set to accelerate.”

Industries that are hiring

Leisure and hospitality led the job gains, with 50,000. Professional and business services added 46,000; trade, transportation and utilities, 44,000; education and health care, 43,000.

Construction added 21,000 jobs as rebuilding continued in hurricane hit areas of Texas and Florida. Manufacturing added 14,000 jobs as the industry benefits from a resurgent global economy and oil sector.

Small business struggles

Small businesses added 68,000 jobs, midsize companies added 97,000 and large ones, 70,000. With the labor market tightening, many small businesses have struggled to attract workers since they often pay lower wages and benefits than larger firms.

What's ahead

ADP tries to predict the private-sector total in the government's employment report that follows it later in the week. It often tracks similar trends but misses the mark many months. In January, ADP tallied 234,000 job gains by businesses while the government's report announced 196,000.

Gauging layoffs

Still, initial jobless claims, a gauge of layoffs, have hovered at the lowest levels in nearly 50 years. With unemployment at a 17-year low of 4.1%, that’s a good sign of a healthy labor market.

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