Companies in the U.S. added more workers in February than a month earlier, another sign of labor market strength, data from a private report based on payrolls showed today.
Employment increased by 216,000 for the month after a revised 173,000 gain in January, according to figures from ADP Employer Services. The median estimate in the Bloomberg News survey called for a 215,000 increase this month.
Further employment gains would help generate the wage gains necessary to sustain household spending, which accounts for about 70 percent of the economy. Businesses added 225,000 jobs in February, and the unemployment rate held at 8.3 percent, economists project a Labor Department report will show in two days.
“Everything is pointing to broader employment gains,” Troy Davig, a senior U.S. economist at Barclays Capital Inc. in New York, said before the report. “As people start experiencing a steadier stream of income, that will translate into consumption and that will start building a stronger foundation for growth.”
Estimates ranged from increases of 120,000 to 270,000, according to the Bloomberg survey of 44 economists.
Stocks rose, following the biggest drop in 2012 for the Standard & Poor’s 500 Index. The S&P 500 climbed 0.3 percent to 1,347.3 at 10:21 a.m. in New York.
Over the previous six reports, ADP’s initial figure was closest to the Labor Department’s first estimate of private payrolls in October, when it overstated the gain in jobs by 6,000. The estimate was least accurate in December, when it overestimated the employment gain by 113,000.
Today’s ADP report showed an increase of 46,000 workers in goods-producing industries, which includes manufacturers and construction companies. Employment at factories rose by 21,000.
Service providers added 170,000 workers, ADP said.
Companies employing more than 499 workers expanded their workforces by 20,000 jobs. Medium-sized businesses, with 50 to 499 employees, created 88,000 jobs and small companies increased payrolls by 108,000, ADP said.
Overall payrolls, which include government workers, probably rose by 210,000 in February, according to the median forecast of economists surveyed by Bloomberg before the Labor Department’s March 9 report.
Even with “positive developments” in the job market, Federal Reserve Chairman Ben S. Bernanke told lawmakers last week that the “modest and uneven” expansion needs the support of monetary policy. The central bank said in January that economic conditions are likely to warrant low interest rates at least through late 2014.
The ADP report is based on data from about 340,000 businesses employing more than 21 million workers. Macroeconomic Advisers LLC in St. Louis produces the data with ADP.
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