ADP Reports Private Sector Employment and Compensation Both Increased in February

According to the ADP National Employment Report released on Wednesday, private sector employment increased by 77,000 jobs in February. Year-over-year, annual compensation was up 4.7%.

Hiring in February slowed to the smallest gain since July 2024, with trade and transportation, health care and education, and information showing job losses. Small business employment also fell.

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.

Commenting on the report, ADP Chief Economist Nela Richardson said:

“Policy uncertainty and a slowdown in consumer spending might have led to layoffs or a slowdown in hiring last month. Our data, combined with other recent indicators, suggests a hiring hesitancy among employers as they assess the economic climate ahead.”