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News : US Economy Last Updated: Mar 5, 2014 - 4:21 PM


US private sector jobs data was weak in February; Services PMI dips
By Finfacts Team
Mar 5, 2014 - 4:16 PM

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US private sector jobs data issued Wednesday was weak in February as factories added few new employees, according to a closely watched survey. Meanwhile, two services PMI (purchasing managers' index) reports showed that activity dipped in the month.

Private sector employment increased by 139,000 jobs from January to February according to the February ADP National Employment Report which is derived from ADP’s actual payroll data, measures the change in total nonfarm private employment each month on a seasonally-adjusted basis.

Goods-producing employment rose by 19,000 jobs in February, up from a downwardly-revised figure of 12,000 in January. Nearly all of the growth came from the construction industry which added 14,000 jobs over the month; this followed downwardly revised increases of 17,000 in the prior two months. Manufacturing eked out a small gain in February adding just 1,000 jobs. January’s decline in manufacturing was upwardly revised to a loss of just 7,000 jobs.

Service-providing industries added 120,000 jobs in February, up from a downwardly-revised January figure of 116,000. The ADP National Employment Report indicates that professional/ business services contributed the most to growth in service-providing industries, adding 33,000 jobs. This was well below the aver percentage gains for the industry in 2013. Expansion in trade/transportation/utilities accelerated slightly after a poor showing in January, gaining 31,000 jobs in February. Financial activities employment fell for the second straight month after January’s reading was downwardly revised to an 8,000 job loss. These two months have been the weakest for financial services employment since January and February of 2011.

Mark Zandi, chief economist of Moody’s Analytics, said, "February was another soft month for the job market. Employment was weak across a number of industries. Bad winter weather, especially in mid-month, weighed on payrolls. Job growth is expected to improve with warmer temperatures.”

Services

Anthony Nieves, chair of the Institute for Supply Man percentagement (ISM) Non-Manufacturing Business Survey Committee said today: "The NMI registered 51.6% in February, 2.4% percentage points lower than January's reading of 54%. The Non-Manufacturing Business Activity Index decreased to 54.6%, which is 1.7% percentage points lower than the reading of 56.3% reported in January, reflecting growth for the 55th consecutive month and at a slower rate. The New Orders Index registered 51.3%, 0.4% percentage point higher than the reading of 50.9% registered in January. The Employment Index decreased 8.9% percentage points to 47.5% from the January reading of 56.4% and indicates contraction in employment for the first time after 25 consecutive months of growth. The Prices Index decreased 3.4% percentage points from the January reading of 57.1% to 53.7%, indicating prices increased at a slower rate in February when compared to January. According to the NMI®, ten non-manufacturing industries reported growth in February. The majority of respondents' comments indicate a slowing in the rate of growth month over month of business activity. Some of the respondents attribute this to weather conditions. Overall respondents' comments reflect cautiousness regarding business conditions and the economy."

In a separate report Markit said that February data signalled a marked slowdown in US service sector output growth, but new business volumes increased at a similarly robust pace to that seen in the previous month. Survey respondents widely commented on disruptions of business activity from unusually bad weather and, as a result, service providers recorded a renewed increase in backlogs of work in February. Meanwhile, inflationary pressures continued to subside during the latest survey period, with input costs and output charges both rising at slower rates than in January. Adjusted for seasonal influences, the final Markit U.S. Services PMI Business Activity Index dipped sharply to 53.3 in February, from 56.7 in the previous month. Although the index was above the 50.0 no-change mark and signalled a solid pace of expansion, the latest reading was the lowest since October 2013.

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