U.S. companies kept adding jobs in February despite the coronavirus scare, as private payrolls expanded well above the pace that Wall Street had anticipated.
Employment excluding government jobs rose by 183,000 for the month, according to a report Wednesday from Moody’s Analytics, topping the 155,000 that economists surveyed by Dow Jones had expected.
The job growth came during a month in which fear spread that the COVID-19 strain would lead to a global economic slowdown. So far, 93,455 cases have been confirmed worldwide, including 3,198 deaths.
However, the economy remained resilient and companies continued to hire in the face of the worries and a wildly volatile stock market that reflected jitters over how widespread the coronavirus might get.
“COVID-19 will need to break through the job market firewall if it is to do significant damage to the economy,” Mark Zandi, chief economist at Moody’s Analytics, said in a statement. “The firewall has some cracks, but judging by the February employment gain it should be strong enough to weather most scenarios.”
Zandi told CNBC that the coronavirus impact has not shown up in the data yet.
“I haven’t seen anything to indicate that there’s any impact on the labor market at this point in time,” he said on “Squawk Box.”
However, he added that “it’s just a matter of time” before the numbers in future months reflect the situation.
Get the market reaction here.
While the report was better than expected, the news was tempered by a big downward revision to January’s number, which fell from an initially reported 291,000 down to 209,000, still better than Wall Street estimates but off the initial report that had pointed to the biggest monthly gain in nearly five years.
The revised ADP number brought it almost perfectly in line with the government’s initial private payroll estimate of 206,000 for January. Total payrolls, including government jobs, rose by 225,000 for the month, according to the Bureau of Labor Statistics.
Despite the cut to January’s number, February’s gain was well above the previous 12-month average of 154,000 a month.
Some economists think that small business could take the biggest hit from a virus-induced slowdown, and that was reflected in the ADP numbers.
Almost all of February’s job creation — 133,000 — came from companies that employ more than 55 workers. At the other end of the scale, those with fewer than 50 workers added just 24,000 jobs.
By sector, the additions were concentrated in service industries, which added 172,000 and make up the bulk of the U.S. economy. Gains were widespread, with education and health services leading with 46,000, while leisure and hospitality added 44,000. Another 38,000 came from professional and business services, while trade, transportation and utilities contributed 31,000.
Financial activities rose by 9,000 and information services lost 2,000 positions.
On the goods-producing side, construction was up 18,000 though manufacturing decreased by 4,000 and natural resources and mining also saw contraction, down 3,000.
The ADP report serves as a precursor to the Labor Department’s monthly nonfarm payrolls report on Friday. Economists are looking for growth of 175,000 in that report, and for the unemployment rate to fall back to its 50-year low of 3.5%.
This is a breaking news story. Please check back for updates.