“There is a trade-off in the labor market right now,” said ADP chief economist Nela Richardson. “We’re seeing robust hiring, which is good for the economy and for workers, but wage growth remains fairly strong. The modest slowdown in wage growth alone is unlikely to cause inflation to ease anytime soon.”
Fed Chairman Jerome Powell has promised a higher interest rate summit in view of persistently high inflation. Furthermore, if the body of data suggests that faster tightening is warranted, the Fed would be willing to increase the pace of rate hikes, Powell said during his testimony before a congressional committee.
The ADP report is based on around 500,000 US companies with around 25 million employees and is considered an indicator for the official jobs report, which will be released on Friday. The ADP report includes only private sector employment, while the official report also includes government employment.
Economists polled by Dow Jones Newswires estimate that 225,000 nonfarm payrolls were added in February based on the official jobs report. They see the unemployment rate at 3.4 percent.
DJG/apo/kla
FRANKFURT (Dow Jones)
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