ADP National Employment Report: Private Sector Employment Increased by 140,000 Jobs in February; Annual Pay was Up 5.1%

Private sector employment increased by 140,000 jobs in February and annual pay was up 5.1 percent year-over-year, according to the February ADP^® National Employment Report^TM produced by the ADP Research Institute^® in collaboration with the Stanford Digital Economy Lab (“Stanford Lab“). The ADP National Employment Report is an independent measure and high-frequency view of the private-sector labor market based on actual, anonymized payroll data of more than 25 million U.S. employees.

The jobs report and pay insights use ADP’s fine-grained anonymized and aggregated payroll data to provide a representative picture of the private-sector labor market. The report details the current month’s total private employment change, and weekly job data from the previous month. Because the underlying ADP payroll databases are continuously updated, the report provides a high-frequency, near real-time measure of U.S. employment. This measure reflects the number of employees on ADP client payrolls (Payroll Employment) to provide a richer understanding of the labor market. ADP’s pay measure uniquely captures the earnings of a cohort of almost 10 million employees over a 12-month period.

“Job gains remain solid. Pay gains are trending lower but are still above inflation,” said Nela Richardson, chief economist, ADP.  “In short, the labor market is dynamic, but doesn’t tip the scales in terms of a Fed rate decision this year.”

The jobs report and pay insights use ADP’s fine-grained anonymized and aggregated payroll data to provide a representative picture of the private-sector labor market. The report details the current month’s total private employment change, and weekly job data from the previous month. Because the underlying ADP payroll databases are continuously updated, the report provides a high-frequency, near real-time measure of U.S. employment. This measure reflects the number of employees on ADP client payrolls (Payroll Employment) to provide a richer understanding of the labor market. ADP’s pay measure uniquely captures the earnings of a cohort of almost 10 million employees over a 12-month period.

“Job gains remain solid. Pay gains are trending lower but are still above inflation,” said Nela Richardson, chief economist, ADP.  “In short, the labor market is dynamic, but doesn’t tip the scales in terms of a Fed rate decision this year.”

February 2024 Report Highlights*

View the ADP National Employment Report and interactive charts at www.adpemploymentreport.com.

JOBS REPORT

Private employers added 140,000 jobs in February
While employment growth remained steady, pay gains for job-changers accelerated for the first time in more than a year, rising to 7.6 percent from 7.2 percent.

Change in U.S. Private Employment:     140,000

Change by Industry Sector

– Goods-producing:     30,000

• Natural resources/mining     -4,000
• Construction     28,000
• Manufacturing     6,000

– Service-providing:     110,000

• Trade/transportation/utilities     24,000
• Information     -2,000
• Financial activities     17,000
• Professional/business services     5,000
• Education/health services     11,000
• Leisure/hospitality     41,000
• Other services     14,000

Change by U.S. Regions

– Northeast:     20,000

• New England     6,000
• Middle Atlantic     14,000

– Midwest:     39,000

• East North Central     32,000
• West North Central     7,000

– South:     37,000

• South Atlantic     35,000
• East South Central     -13,000
• West South Central     15,000

– West:     42,000

• Mountain     7,000
• Pacific     35,000

Change by Establishment Size

– Small establishments:     13,000

• 1-19 employees     11,000
• 20-49 employees     2,000

– Medium establishments:     69,000

• 50-249 employees     53,000
• 250-499 employees     16,000

– Large establishments:     61,000

• 500+ employees     61,000

PAY INSIGHTS

Pay gains for job-changers rose in February
For job-changers, year-over-year pay gains were 7.6 percent, up from the prior month and the first increase since November 2022. Pay gains for job-stayers continued to decelerate, reaching 5.1 percent, the smallest gain since August 2021.

Median Change in Annual Pay (ADP matched person sample)

– Job-Stayers     5.1%

– Job-Changers     7.6%

Median Change in Annual Pay for Job-Stayers by Industry Sector

– Goods-producing:

• Natural resources/mining     4.5%
• Construction     5.5%
• Manufacturing     4.8%

– Service-providing:

• Trade/transportation/utilities     4.6%
• Information     4.8%
• Financial activities     5.5%
• Professional/business services     5.1%
• Education/health services     5.7%
• Leisure/hospitality     5.9%
• Other services     5.5%

Median Change in Annual Pay for Job-Stayers by Firm Size

– Small firms:                                                                

• 1-19 employees     4.4%
• 20-49 employees     5.2%

– Medium firms:                                                             

• 50-249 employees     5.4%
• 250-499 employees     5.3%

– Large firms:                                                                

• 500+ employees     5.1%