Private Jobs Continue to Show Signs of Growth
CNBC.com Senior Writer
Private companies added 198,000 jobs in February, well ahead of analyst estimates and indicating that the labor market is continuing to thaw, according to a report Wednesday.
Economists had expected the count by ADP and Moody's Analytics to show 170,000 new positions.
The report comes two days before the Department of Labor releases its nonfarm payrolls total, which likely will show a net of 152,000 new positions. The Labor numbers include government positions.
Though the ADP and Labor numbers don't always jibe, the higher than expected private payrolls quickly caused economists to increase their estimates for the Friday report.
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Deutsche Bank's Joe LaVorgna, in a Twitter message, sharply increased his prediction, from 125,000 to 180,000.
"The latest reading serves to underscore what businesses have been telling us recently in that they have been caught off guard by rising demand, that inventories were kept lean and in response they have been keen to add incremental labor," said Andrew Wilkinson, chief economist strategist at Miller Tabak. "The labor market recovery is accelerating with rising demand creating fresh opportunities well beyond the financial crisis."
Stock market futures added to gains following the report while government debt yields ticked higher as well.
Job growth was distributed fairly evenly, with small firms leading the way with 77,000 new positions. Medium businesses grew 65,000 while large businesses hired an additional 57,000 workers.
"Small businesses are kicking into gear," Moody's economist Mark Zandi said on CNBC's "Squawk Box" show. "They're closely tied to the construction cycle...That's a key reason why the small business sector was lagging the economy through the recovery."
However, Zandi said the employment picture may slow going forward as government spending cuts kick in and predicted the 7.9 percent unemployment rate actually could rise a bit heading later into the year.
The service sector continued to lead the job growth, accounting for 164,000, or 83 percent, of the new positions.
Trade, transportation and utilities were the highest by industry, with 45,000 jobs. Professional and business services crated 35,000 while construction added 21,000.
ADP also revised its January count higher, from an original 192,000 to 215,000.
—By CNBC's Jeff Cox. Follow him on Twitter at @JeffCoxCNBCcom.