Economic Snapshot: Private-sector employment adds 214,000 jobs
Several segments of the ADP Employment Report reported increases in February. However, manufacturing jobs continue to drop.
ADP employment report
Private-sector employment increased by 214,000 jobs from January to February, up from 193,000 jobs in January.
Large businesses and small businesses both contributed the highest number of jobs in February, at 76,000 jobs each. This was a huge jump for large businesses from the 44,000 jobs added in January. Small businesses added 75,000 jobs last month. Medium businesses added 62,000 jobs in February, down from the downwardly revised 74,000 jobs in January.
Service-providing employment rose by 208,000 jobs in February, up from a downwardly revised 174,000 in January. Professional/business services contributed 59,000 jobs, a big increase from the downwardly revised 38,000 in January. Trade/transportation/utilities grew by 20,000, down from a downwardly revised 26,000 the previous month. Financial activities added 8,000 jobs, the least in that sector since August 2015.
Goods-producing employment rose by 5,000 jobs in February, a sharp decrease from the upwardly revised 19,000 jobs in January. The construction industry added 27,000 jobs, slightly above the upwardly revised 26,000 in January. Meanwhile, manufacturing lost 9,000 jobs, the second largest drop in five years.
ISM manufacturing index
The ISM Manufacturing Index registered 49.5 percent in February, an increase of 1.3 percentage points. Economic activity in the manufacturing sector contracted in February for the fifth consecutive month, while the overall economy grew for the 81st consecutive month.
The New Orders Index registered 51.5 percent, the same reading as in January. The Production Index registered 52.8 percent, rising 2.6 percentage points from the previous month.
The Employment Index registered 48.5 percent, an increase of 2.6 percentage points from January. Inventories of raw materials registered 45 percent, an increase of 1.5 percentage points. The Prices Index registered 38.5 percent, jumping 5 percentage points from the previous month, indicating lower raw materials prices for the 16th consecutive month.
Nine of the 18 manufacturing industries reported growth in February and seven contracted.
GDP
Real gross domestic product increased at an annual rate of 1.0 percent in the fourth quarter of 2015, according to the “second” estimate released by the Bureau of Economic Analysis. The first estimate was 0.7 percent.
The increase in real GDP reflected positive contributions from personal consumption expenditures (PCE), residential fixed investment, and federal government spending. These were partly offset by negative contributions from exports, nonresidential fixed investment, state and local government spending, and price inventory investment. Imports, which are a subtraction in the calculation of GDP, decreased.
