ADP a touch light, much slower trend than BLS/Powell was brief and said nothing new

ADP said a net 140k private sector jobs were created in February, just under the estimate of 150k and vs 111k in January (revised up by 4k). Most of the hiring took place at companies with more than 50 employees.

The service sector added 110k with leisure/hospitality leading the way, adding 41k. That was followed by a 24k person increase in trade/transportation/utilities and 17k rise in financial activities. The ‘information’ sector shed 2k. On the goods side, 30k were added with almost all coming in construction, 28k but no breakdown on what type of construction as it very well could be mostly government driven manufacturing facilities being built. Manufacturing added 6k, stemming a weak trend.

Wage growth is still very good. For ‘job stayers’, wages rose 5.1% vs 5.2% in the month before y/o/y. For ‘job changers’, they saw an increase of 7.6% y/o/y and that was an improvement from the 7.2% pace seen in January. While these figure are well off their highs, these are still pretty heady wage gains.

Bottom line, there continues to be quite the difference between what ADP is telling us when compared with the BLS. The 3 month ADP private sector average is 136k vs the 6 month average of 127k. If the BLS private sector print comes in at the 160k that is expected, that would be a 3 month average of 252k and the 6 month average of 200k. Looking out 12 months, they converge. Between continuing claims and many other anecdotes (including the ISM’s), I believe reality matches more with what ADP has said of late, more so than the BLS.