ADP National Employment Report: Private Sector Jobs Up 77,000 in February; Annual Pay Rises 4.7%

The ADP National Employment Report (NER) for February 2025 has been released, revealing a 77,000-job increase in private-sector employment and a 4.7% annual pay increase for job-stayers. This report, based on ADP payroll data covering more than half a million companies with over 25 million employees, provides valuable insights into the U.S. labor market.

The 77,000-job increase in February is a significant improvement from the 183,000 jobs added in January, indicating a strong start to the year for the private sector. This growth is particularly notable given the ongoing economic recovery and the potential impact of the Omicron variant on labor market dynamics.

The 4.7% annual pay increase for job-stayers is a slight decrease from the 4.9% increase reported in January. However, this figure remains robust, indicating strong wage growth in the private sector. This trend aligns with broader economic conditions, as companies continue to compete for talent in a tight labor market.

The ADP NER also highlights key industry and regional trends. The leisure and hospitality sector led the way with a 15% increase in employment growth, reflecting the ongoing recovery in this hard-hit industry. The construction sector also reported strong employment growth, with a 2.9% increase and a 5% wage growth rate for job-stayers. The professional and business services sector reported a 5.7% wage growth rate and a 24.8% job-switching rate, indicating strong demand for skilled workers in this sector.

Regionally, the South reported the highest employment growth rate of 5.1%, while the West reported the second-highest rate of 4.5%. The Northeast reported the lowest growth rate of 2.3%, which may be due to the region's slower economic recovery from the pandemic and the ongoing impact of the pandemic on industries such as leisure and hospitality.

The ADP National Employment Report provides valuable insights into the U.S. labor market, highlighting key industry and regional trends that align with broader economic conditions. The report's findings indicate a strong start to the year for the private sector, with robust job growth and wage increases. As the economy continues to recover, investors should monitor these trends closely to assess the health of the labor market and the broader economy.