US private-sector hiring surged in February, posting the biggest increase in nearly six years and far outstripping expectations, with big gains in small and medium businesses, payroll services firm ADP reported Wednesday.
Private payrolls increased an eye-popping 298,000 in the month, beating the consensus forecast for a 180,000 rise, and outpacing the 246,000 increase in January.
It was the biggest increase in private employment since April 2011.
Goods-producing industries posted the biggest increase in the history of the report, which goes back to April 2002, adding 106,000 workers last month, while services firms increased 193,000.
The data, which is extracted from ADP payroll data, is frequently seen as a predictor of the Labor Department’s monthly employment report, which is due out Friday.
The consensus forecast is for an increase of 188,000 in total payrolls and 185,000 for private jobs, but economists may revise their estimates upward following the ADP report.
The gains also are likely to increase confidence in markets that the Federal Reserve will raise interest rates next week, given the solid indications the economic recovery is picking up steam.
“February proved to be an incredibly strong month for employment with increases we have not seen in years,” said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute.
Mark Zandi, chief economist of Moody’s Analytics said in the ADP statement, the unseasonably mild winter weather “undoubtedly played a role” in the strong numbers.
“But near record high job openings and record low layoffs underpin the entire job market,” he said, noting strength in construction, mining and manufacturing.
Broken down by size, medium-sized business increased 122,000 and small businesses added 104,000. Large firms lagged with 72,000.
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