Just as the market felt uneasy about the outlook for the U.S. economy, the ADP employment report, known as the "little non-farm," was released as scheduled. In February, the U.S. private sector added 63,000 jobs, which not only rebounded significantly from the revised 11,000 jobs in January but also firmly met the market expectation of 48,000 jobs.

This report was like a calming balm, slightly easing the already tense nerves. After the data was released, CME’s FedWatch tool indicated that the probability of the Federal Reserve keeping the interest rate unchanged in March soared to 97.3%. However, for economists focused on the details of the data, this seemingly brilliant report hides deep concerns about the U.S. labor market's significant "unevenness."

1. The Bright Total: A "Recovery" Supported by Two Major Industries

● Looking at the number 63,000 alone is indeed eye-catching. This is the highest level since August of last year, marking that the labor market seems to have found its footing again after nearly stagnating at the beginning of the year.

● However, when you look past the total figure, you will find that the growth momentum is actually quite concentrated. The entire hiring boom in February was nearly entirely supported by two industries:

1. Education and Healthcare Services: This long-standing employment "reservoir" once again made a strong showing this month, adding 58,000 jobs in one go, leading all industries without question.

2. Construction: Despite high interest rates, the construction industry surprisingly contributed 19,000 positions, becoming the runner-up driving growth.

Combined, these two industries have far exceeded the total of 63,000. In other words, without their support, this employment report would likely look quite poor.

2. The Other Side of Growth: Who is "Dragging Behind"?

In sharp contrast to the hot performance of these two industries are other corners of the U.S. economy. The report shows that the chill of the job market is spreading across several key sectors:

● Professional and Business Services: This industry, seen as a bellwether for white-collar jobs, lost 30,000 jobs in February, becoming the largest drag on employment.

● Manufacturing: Although the Trump administration has been trying to bring manufacturing jobs back through various measures, the reality remains bleak according to the data. This sector continued to lose 5,000 jobs this month.

● Trade, Transportation, and Utilities: Reduced by 1,000 jobs.

This "ice and fire" situation reveals the essential issue of the current U.S. labor market: a lack of breadth. ADP's chief economist, Nela Richardson, highlighted the key point in interpreting the report: "Due to hiring being concentrated in a few industries, job hopping has not led to widespread salary growth."

3. The Secret of Salaries: Job Hopping No Longer Means "Salary Increase"

● If employment numbers are the macro barometer, then changes in salaries are the temperature gauge most sensitive to ordinary people. The February report sent a somewhat contradictory signal in this regard.

● For those who chose to stay with their current employer, their situation seems quite good, with salary increases stable at 4.5%. However, for those trying to switch jobs for higher income, the reality is somewhat cruel: salary growth for job changers dropped to 6.3%, down 0.3 percentage points from January.

● More importantly, Richardson pointed out that the salary premium from changing jobs has dropped to its lowest level since ADP began tracking this metric. This means that in the current employment environment, the risk of using job changes to increase income is growing, while the rewards are shrinking. This also partly explains why, despite an increase in hiring, employees' motivation to change jobs is diminishing — everyone is choosing to "lay low" in their current positions, prioritizing stability.

4. Differentiation of Business Sizes: Small Businesses Carrying the Banner

● Another interesting detail is the change in the main contributors to job creation. Unlike recent months, February's employment growth primarily came from small businesses with fewer than 50 employees, which contributed 60,000 jobs in a single month. Meanwhile, large enterprises with more than 500 employees only added 10,000 jobs, and medium-sized enterprises even reduced by 7,000.

● This may reflect that in an uncertain economic environment, small businesses have shown more flexible hiring intentions than large companies, and large enterprises may be adopting a more cautious attitude toward expanding hiring in response to inflation and cost pressures.

5. The Federal Reserve's "Pause Button" is Pressed More Steadily

● For the Federal Reserve, which is walking a tightrope between inflation and recession, this mixed ADP report may actually provide some relief.

● Although the total exceeded expectations, the structural differentiation and the slowdown in salary increases precisely indicate that there are no overheating signs in the labor market, but rather a slow stabilization. This provides an excellent excuse for the Federal Reserve: they need not worry about employment being too cold and requiring rapid interest rate cuts, nor about employment being too hot and exacerbating inflation.

● Recent statements from Federal Reserve officials have also confirmed this, as their confidence in the stabilization of the employment situation is increasing. The market has since adjusted its expectations; according to the CME’s FedWatch tool, traders now broadly believe that rates will absolutely not be moved at the March meeting, and they have even pushed back the expectation for the first rate cut to July.

6. Forward Looking: The True "Big Test" is on Friday

● Of course, although ADP data is referred to as the "little non-farm," it is still not official data. The real focus of the market has shifted to the February non-farm payroll report that the U.S. Bureau of Labor Statistics is set to release this Friday.

● The market currently expects that Friday's report will show approximately 60,000 new jobs for February, and the unemployment rate may remain stable at 4.3%. Unlike ADP, this official report also includes government hiring data.

● Today's "uneven" ADP report, will it be a preview for Friday's non-farm or will it become an independent reversal storyline? All suspense will be revealed this Friday.

Join our community, let’s discuss and become stronger together!

Official Telegram community: https://t.me/aicoincn
AiCoin Chinese Twitter: https://x.com/AiCoinzh

OKX Welfare Group: https://aicoin.com/link/chat?cid=l61eM4owQ
Binance Welfare Group: https://aicoin.com/link/chat?cid=ynr7d1P6Z

免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到support@aicoin.com，本平台相关工作人员将会进行核查。