WASHINGTON – Companies added fewer workers than projected in February, a sign that U.S. employers were waiting for a pickup in demand before boosting headcount, a private report based on payrolls showed today.
The 139,000 increase in employment followed a revised 127,000 gain in January that was weaker than initially reported, the weakest two months since August-September 2012, according to the ADP Research Institute in Roseland, N.J. The median forecast of 39 economists surveyed by Bloomberg called for a 155,000 advance.
Harsh winter weather conditions, which kept some shoppers away from stores and car dealerships, help explain why companies were hesitant to accelerate hiring at a more robust pace. Faster payroll growth that spurs bigger wage gains would help to boost the consumer purchases that make up almost 70 percent of the economy.
“Employment was weak across a number of industries,” Mark Zandi, chief economist at Moody’s Analytics Inc. in West Chester, Pa., said in a statement. Moody’s produces the figures with ADP. “Bad winter weather, especially in mid-month, weighed on payrolls. Job growth is expected to improve with warmer temperatures.”
Estimates in the Bloomberg survey of economists ranged from gains of 100,000 to 180,000 after a previously reported increase of 175,000 in January. With today’s report, ADP issued its annual benchmark revisions to incorporate revised payrolls data from the Bureau of Labor Statistics.
ADP’s numbers have missed the mark in tracking the government’s jobs figures over the past couple of months. The group’s initial estimates showed a 238,000 gain in employment for December followed by a 175,000 January increase. That compares with the Labor Department’s initial estimate of an 87,000 gain in December private payrolls and a 142,000 increase in January.
“The ADP report hasn’t done a particularly good job in signaling first prints in the BLS report, overpredicting that number by 33,000 in January, and a whopping 151,000 in December,” Michael Feroli, chief U.S. economist at JPMorgan Chase & Co. in New York, said in an email. “Not surprisingly, the magnitude of those misses was revised lower after the revisions in today’s report, and generally the ADP revisions have an uncanny ability to make first-print misses disappear.”