Private-sector payrolls in America rose by 183K in February, according to new ADP data. That was better than expected and enough to lift the less-volatile 3-month average rate of job creation to 186K, the highest reading in nearly two years. If not quickly contained, coronavirus-related disruptions could weigh on hiring in subsequent months, but the report’s authors argued that “COVID-19 will need to break through the job market firewall if it is to do significant damage to the economy. The firewall has some cracks, but judging by the February employment gain it should be strong enough to weather most scenarios.”
Small business employment conditions also firmed in February, as employers with 1-49 workers added the most payrolls since April of last year. However, there were significant revisions to the entire ADP data series this month that have drastically lowered the apparent share of job creation going to small- and medium-sized businesses over the past decade. In fact, net annual hiring at small employers has now turned negative, further highlighting the substantial challenges these organizations can face when trying to compete with larger corporations for talent in a tightening labor market. Fortunately more small businesses are adapting to this environment by leveraging the various efficiencies provided by professional employer organizations (PEOs) that can make offering attractive benefits more affordable.
Sources: Econoday, ADP