Has Donald Trump already begun to usher in a new era of job creation? The White House will certainly advance that argument after seeing today’s ADP report on job growth in February, Trump’s first full month as president, and ADP’s analyst gives them some ammunition for that claim. The report came in 100,000 jobs higher than analysts’ expectations at 298,000 — “an absolute blowout,” CNBC announced:
Companies added jobs at a blistering pace in February, with a notable shift away from the service-sector positions that have dominated hiring for years, according to a report Wednesday.
Employment in the private sector surged by 298,000 for the month, with goods producers adding 106,000, ADP and Moody’s Analytics said. Construction jobs swelled by 66,000 and manufacturing added 32,000.
The total shattered market expectations of 190,000, according to economists surveyed by ADP. The blockbuster report also solidified market expectations for the Fed to hike interest rates next week. Probability for an increase jumped to 91 percent after the release, according to the CME.
The actual number itself is somewhat higher than for January, as ADP’s chart shows, so the February report isn’t a huge shift in terms of ADP’s projections:
It is the highest projection ADP has made in the past year, even if the change in growth is incremental to the previous month. Compared to expectations, however, the number is dramatic, and ADP actually has a better track record on those calls than they sometimes do when their numbers come in closer to expectations:
Can this be attributable to Trump, or to a hangover of Barack Obama’s policies? Mark Zandi, chief economist for ADP and usually more inclined to favor Obama policies, surprises the panel by crediting a new confidence in American business that has resulted from Trump’s election, although he qualifies this by saying the economy has been “fundamentally strong” for some time:
“Confidence is playing a large role,” Mark Zandi, chief economist of Moody’s Analytics, told CNBC. “Businesses are anticipating a lot of good stuff — tax cuts, less regulation. They are hiring more aggressively.”
The Bureau of Labor Statistics will produce the official figures on Friday, and keep in mind that the ADP numbers do tend to drift a bit from the final product. If this ADP report turns out to be an accurate predictor this month, the Trump administration should have a good weekend news cycle, as long as they don’t step on it.