Private payrolls swell by 212,000

February’s gains are 13th straight

In this photo taken Friday, Feb. 6, 2015, active duty U.S. Marine Corps Jerome Atger, left, prepares to show his resume to Peter Caspari, of the Employer Support of the Guard and Reserve, right, at the annual Veterans Career and Resource Fair in Miami. Payroll processor ADP reports how many jobs private employers added in February on Wednesday, March 4, 2015.
In this photo taken Friday, Feb. 6, 2015, active duty U.S. Marine Corps Jerome Atger, left, prepares to show his resume to Peter Caspari, of the Employer Support of the Guard and Reserve, right, at the annual Veterans Career and Resource Fair in Miami. Payroll processor ADP reports how many jobs private employers added in February on Wednesday, March 4, 2015.

WASHINGTON -- U.S. businesses added more than 200,000 jobs in February for the 13th straight month, a private survey found.

Payroll processor ADP said Wednesday that companies added 212,000 jobs last month, a solid gain, although down from 250,000 in the previous month. January's figure was revised up from 213,000.

The figures come just before Friday's government report on the labor market, which economists forecast will show an increase of 240,000 jobs, according to a survey by data provider FactSet. The unemployment rate is expected to fall to 5.6 percent from 5.7 percent.

The ADP numbers cover only private businesses and sometimes diverge from the government's more comprehensive report, which includes government agencies.

A burst of hiring in the past year has lifted the number of Americans earning paychecks, and a sharp drop in gasoline prices means those paychecks can buy more goods and services. That has accelerated U.S. economic growth and encouraged companies to add jobs at a steady pace.

Still, February's hiring was the slowest in nine months, according to the ADP data. Most economists expected a slight slowdown after a run of huge job gains. Employers added 423,000 jobs in November, and more than 1 million from November through January, the fastest three-month pace since 1997. More than 3 million people have been hired in the past 12 months.

"Job growth is strong, but slowing from the torrid pace of recent months," said Mark Zandi, chief economist at Moody's Analytics. "Job gains remain broad-based, although the collapse in oil prices has begun to weigh on energy-related employment."

Moody's Analytics helps compile the report.

Those job gains are lifting consumer spending, which rose in last year's fourth quarter at the fastest pace in four years. Spending grew at a solid 0.3 percent rate in January, after adjusting for prices, which fell.

Zandi also said heavy snow and cold in the Northeast may have dragged down hiring last month.

Still, he expects the economy to grow 3 percent this year, a level consistent with hiring of about 250,000 a month.

U.S. services firms' activity rose at a slightly faster rate in February, powered by hotels, restaurants and wholesalers.

The Institute for Supply Management said Wednesday that its services index rose to 56.9 in February, up from January's reading of 56.7. Any reading over 50 indicates expansion.

The survey suggests further growth in employment and imports, as a strong hiring streak over the past year has bolstered consumer spending.

"The bottom line is that the U.S. economy remains in good health," said Paul Dales, senior U.S. economist at Capital Economics.

The ISM is a trade group of purchasing managers. Its survey of services firms covers businesses that employ 90 percent of the American workforce, including retail, construction, health care and financial services companies.

Fourteen sectors reported growth in February, while four said activity lessened. In addition to hotels, restaurants and wholesalers, the sectors reporting growth include real estate, utilities, agriculture and financial sectors. Activity dropped for mining, construction, and arts and entertainment.

The decline in oil prices has hurt business for firms involved in drilling and construction.

"Business conditions are seeing less money being spent on capital projects by the major oil companies," one construction firm said in the survey.

"The economy has managed to hold up at decent levels of activity despite all these headwinds," which include slow overseas markets, said Jacob Oubina, a senior U.S. economy at RBC Capital Markets LLC in New York. "As these headwinds dissipate, there's the prospect for a well-north-of-trend economic growth backdrop."

Retailers say cheaper gasoline is helping sales, expanding an economy where nearly 70 percent of all activity comes from consumer spending.

The ISM survey indicated that many companies faced pressures because of the backlog caused by the West Coast port labor dispute, a contract disagreement that was largely resolved several days ago.

"It will transpose into better margins by saving money and not having to deal with the issues of rerouting and airline freight," said Tony Nieves, chairman of the ISM's nonmanufacturing survey committee.

Information for this article was contributed by Christopher S. Rugaber and Josh Boak of The Associated Press and by Michelle Jamrisko of Bloomberg News.

Business on 03/05/2015

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