U.S. private employers added fewer jobs than expected in February, even as the number of COVID-19 cases nationwide eased and state governments lifted some lockdown measures implemented to curb the spread of the virus, according to the ADP National Employment Report released Wednesday.
The report showed that companies added 117,000 jobs last month, missing the 177,000-job increase that economists surveyed by Refinitiv had predicted.
“The labor market continues to post a sluggish recovery across the board,” Nela Richardson, chief economist at ADP, said in a statement. “We’re seeing large-sized companies increasingly feeling the effects of COVID-19, while job growth in the goods-producing sector pauses.
The job gains were concentrated heavily in services-related businesses, which accounted for 131,000 of the total increase. Trade, transportation and utilities led those businesses with 48,000 new jobs created, while education and health services added 35,000 positions.
The leisure and hospitality industry, one of the hardest hit by the pandemic, saw its payroll increase by 26,000 last month.
"With the pandemic still in the driver’s seat, the service sector remains well below its pre-pandemic levels," Richardson said. "However, this sector is one that will likely benefit the most over time with reopenings and increased consumer confidence."
Medium-sized businesses that employ between 50 to 499 employees saw the most growth last month, with 57,000 jobs created. Small businesses, meanwhile, added 32,000 positions, while large businesses' payroll increased by 28,000.
The ADP release comes two days ahead of the more closely watched Labor Department jobs report, which is expected to show that payrolls rose by 180,000 and the unemployment rate held steady at 6.3%.
In total, the U.S. has recovered roughly half of the 22 million jobs lost during the first two months of the pandemic. There are still about 9.9 million more Americans out of work than there were a year ago in February before the crisis began.