Solid but Even: Private Hiring Picks Up as Services Signals Diverge — Evening Brief – 03.04.26

Private-sector hiring showed a modest but clear pickup in February, even as the broader services economy sent a split message on momentum.   

According to new data from ADP, private employers added 63,000 jobs during the month, exceeding the consensus estimate of 43,000 and rebounding from January’s revised total of 11,000 jobs. Wage growth remained steady for workers who stayed in their roles, with pay rising 4.5% year-over-year, while job changers saw pay increases of 6.3%, slightly lower than the prior month. 

Hiring gains were concentrated in a handful of sectors. Education and health services led the increase with 58,000 new jobs, followed by construction with 19,000 positions and information services with 11,000. Offsetting those gains, professional and business services shed 30,000 jobs while manufacturing employment declined by 5,000. 

ADP Chief Economist Nela Richardson said hiring momentum improved in February and wage growth remained healthy for workers who stayed in their positions. However, she noted that employment growth remains uneven across sectors and that the financial benefit of switching jobs has diminished, with the pay premium for job changers falling to its lowest level on record. 

On the activity side, February services readings gave a more nuanced picture.  S&P Global reported its U.S. Composite PMI declined to 51.9 in February from 53.0 in January, reflecting slower growth in the services sector amid weaker customer demand and disruptions from adverse winter weather. 

At the same time, the ISM Services PMI jumped to 56.1, its highest since mid-2022, marking a 20th straight month of expansion. ISM’s key subindexes—prices, employment, new orders, and business activity—each remained in expansion, with all 10 reported indexes above 50 for the first time since March 2021, signaling broad-based, if not uniform, strength in services.