ADP says 198,000 new jobs were created by private sector in February

Automatic Data Processing reported Wednesday morning that the economy generated a seasonally adjusted net gain of 198,000 jobs in February. That was 25,000 more than estimated by a consensus of experts surveyed in advance by Bloomberg. ADP also revised its calculation of private job creation in January to 215,000 from 192,000. The federal Bureau of Labor Statistics will release its report on job creation in both the private and public sectors on Friday.

ADP revised its methodology last November because its results had not been meshing well on a month-to-month basis with the private-sector job creation reported by the BLS. Although ADP's and the BLS's month-to-month estimates of seasonally adjusted private-sector job creation have varied by as much as 85,000 over the past six months since August, their revised totals for that period are quite close, with both reporting just over a million new private-sector jobs created.

The consensus of analysts surveyed by Bloomberg sets the BLS job gain to be announced Friday at 171,000, and those surveyed by The Wall Street Journal at 160,000. The consensus of both sets of experts has been more often wrong than right over the past several years, so viewing it skeptically is always reasonable. The Atlanta Federal Reserve branch estimates that the United States requires 104,000 jobs a month just to keep up with the growth of the working-age population.

ADP bases its report on the payrolls it processes for some 406,000 businesses covering about 23 million employees. BLS bases its report on its Current Employment Statistics survey of 410,000 worksites and on the Current Population Survey of 60,000 households.  

One good feature of the ADP report is that it estimates job growth by business size. In February:

' Small businesses (1-49 employees) +77,000
' Medium businesses (50-499 employees) +65,000
' Large businesses (500 or more employees) +57,000

Jobs increased in the service sector by 164,000 in February, and there were 9,000 more factory jobs, according to ADP.

Another far less optimistic report on the job market's growth was also released Wednesday. TrimTabs Investment Research looks at daily income-tax deposits to the U.S. Treasury withheld from people's paychecks. It estimated just 100,000 new jobs had been created in the private and public sector in February. TrimTabs stated that the economy is "weaker than the conventional wisdom believes."

The firm also noted that, when adjusted for inflation, wages and salaries have dipped 1.2 percent since last February.