US private sector unemployment rate slows to two-year low
Fewer Americans lost their jobs in February than at any time in the past two years.
Estimates from the National Employment Report from Automatic Data Processing (ADP) show that 20,000 private sector jobs were lost last month. This is 40,000 fewer than January and significantly less than the 50,000 expected by some economists, suggesting that employment might be stabilising.
US manufacturing jobs increased in February for the first time since January 2008, albeit by a modest 3,000.
Although US GDP figures have improved in the past two quarters, other economic indicators have swung back and forth, indicating how fragile the recovery is and undermining consumer confidence.
Markets responded positively to the data, with the Dow Jones industrial average rising 35.29 points to 10,441.27.
The figures show that America's service sector added a net 17,000 jobs last month, its second consecutive monthly increase. However, this was not enough to offset 37,000 job losses in the goods-producing sector.
Large businesses, defined as those with 500 or more workers, saw employment decline by 10,000, while small businesses with fewer than 50 staff declined by 18,000. Employment among medium-size businesses, with between 50 and 499 workers, increased by 8,000 -- the first rise since January 2008.
Construction employment fell by 41,000 last month, the smallest decline since July 2008 but only slightly better than the drop of 48,000 reported in January. Employment in the financial services sector dropped by 6,000.
Paul Ashworth, senior economist at Capital Economics, said that the figures were "hardly cause for celebration", given that the recession in output ended eight months ago. He noted that the report, which captures data from private employers only, did not include significant public sector hiring of workers to conduct this year's US census, which is likely to show up in official government employment figures to be released tomorrow.
Because of the way they are collected, the ADP figures also missed the likely negative impact on employment of the snowstorms that crippled large parts of the US last month.
"The ADP report doesn't change our view that the official figures will show payrolls falling by about 100,000, including a 150,000 decline due to the adverse weather."