ADP said that manufacturing employment grew strongly in February, with the sector hiring 32,000 workers for the month on net. It was the third straight monthly gain in manufacturing employment and the fastest monthly pace since March 2012. This was yet another sign that we have turned a corner in the labor market, with employers accelerating their hiring in light of stronger activity and sentiment. In contrast, firms were more cautious in 2016, with 39,000 fewer workers on net last year. Hopefully, the trend of stronger job growth is one that continues in the coming months.
Meanwhile, the healthy job gains were not limited to manufacturing. Nonfarm payroll employment rose by 298,000 in February, its strongest monthly reading since April 2014 and well above the consensus estimate of around 190,000. Beyond manufacturing, the largest employment growth in February was in the following sectors: construction (up 66,000), professional and business services (up 66,000), education and health care (up 40,000), leisure and hospitality (up 40,000) and information (up 25,000). Small and medium-sized businesses (e.g., those with less than 500 employees) accounted for just over three-quarters of all net new workers in the month.
On Friday, we will be anticipating similarly strong jobs data from the Bureau of Labor Statistics (BLS), and the consensus estimate is for around 200,000 new nonfarm payroll jobs for February. Manufacturing employment is expected to remain positive for the third straight month, building off of the total gain of 16,000 seen in December and January.
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