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Survey: US businesses hire
235,000 new workers
By CHRISTOPHER RUGABER, AP Economics Writer
WASHINGTON (AP) — U.S. com- panies added a healthy 235,000 jobs last month, led by solid gains in con- struction, hotels and restaurants, and education and health care, according to a private survey.
The report Wednesday on Febru- ary hiring from payroll provider ADP comes after businesses added 244,000 people in January and 249,000 in De- cember. Those gains should be enough to reduce the unemployment rate, cur- rently a low 4.1 percent, over time.
With unemployment already so low, strong hiring should force employers to offer much higher pay to find the workers they need.
Target, one of the world’s biggest retailers, raised its minimum starting pay for workers for the second time in less than a year this week after seeing a bigger and better pool of candidates.
If pay hikes continue to broaden, companies may have to raise prices to cover at least some of the cost of higher wages, which would lift inflation. That, in turn, could push the Federal Reserve to increase interest rates more quickly, which over time could slow growth.
“The risks of an overheating economy are rising,” Mark Zandi, chief economist at Moody’s Analytics, said. Moody’s helps compile the ADP data.
ADP compiles hiring data from millions of companies that are clients of its payroll services. Its report and government figures frequently diverge from month to month. Last month, the government said 200,000 jobs were added, below ADP’s initial estimate
of 234,000. That figure has since been revised higher.
A FactSet survey shows that econo- mists believe the U.S. jobs report for February, to be released Friday, will likely show a gain of 200,000 jobs. They
also project the unemployment rate will tick down to 4 percent.
Growth should accelerate in the com- ing months, Zandi said, boosted by the tax cuts and recent increases in govern- ment spending enacted by Congress. The unemployment rate could fall to below 3.5 percent by the middle of next year, Zandi projects.
The Trump administration’s tariffs on steel and aluminum imports will likely cost the United States 50,000 to 60,000 jobs, Zandi said, as companies that use the metals as input to other products will have to cut back.
Yet those losses aren’t enough to
knock the U.S. economy off course, he
said. ___
This story has been updated to correct that economists forecast the unemployment rate will fall to 4 percent in the government’s jobs report Friday, not 2 percent.
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