Private sector employers added 63,000 jobs in February, while annual pay grew 4.5% year over year, payroll giant ADP
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Service-providing businesses added 47,000 jobs, while the goods-producing sector added 16,000 jobs. However, the professional and business services sector, which includes accounting and tax preparation along with other services, lost 30,000 jobs.
“What we’ve seen is seven months of decline for that sector,” said ADP chief economist Nela Richardson during a conference call with reporters Wednesday in response to a question from Accounting Today. “We haven’t seen positive gains since July of 2025, so it’s been a weak sector overall in the last several months. Part of the reason is the long shadow, I think, of the pandemic. This is a sector that hired aggressively and dropped back, but also a sector that shifted in terms of work arrangements. A lot of knowledge workers in this space now work remotely. There’s more hybrid work in this space. When you think about those support and administrative services tied to the office, we’re seeing a decline in those roles. It also is a sector that may have overhired and is now feeling the effects of low worker turnover. Maybe new hires in 2022 that they expected to turn over in two to three years are staying put. While we’re not seeing a lot of job gains, we’re not seeing a lot of separations either. It’s a sector that seems to be a little bit frozen when compared to education and health care, for example.”
Education and health services, in contrast, added 58,000 jobs in February.
Small businesses added 60,000 jobs in February, including 58,000 at businesses with between one and 19 employees, but only 2,000 at businesses with between 20 and 49 employees. Medium-size establishments lost 7,000 jobs, including 3,000 at businesses with between 50 and 249 employees, and 4,000 at companies with between 250 and 499 employees. Large establishments with 500 employees or more added 10,000 jobs.
Pay for people who stayed at their jobs grew 4.5% in February year over year, but for those who stayed at their jobs, annualized pay growth slowed to 6.3%. In the professional and business services sector, the rate of annual pay growth for job stayers was 4.3%.
“When you look at the premium in pay growth that incentivizes workers from a monetary perspective to switch jobs is at a record low from all the time we’ve been tracking this data dating back to 2020,” said Richardson. “The pay premium for February was 1.8%, the lowest pay premium we’ve tracked.”
The total number of jobs added in January was revised down from 22,000 to 11,000 by ADP.
Richardson noted the February job gains of 63,000 represented a rebound, but added that even though small businesses with between one and 19 employees created the bulk of the job gains, the pay gains for that sector were only 2.6% for job stayers, suggesting that high-paying jobs are not being created at this point.
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