Companies added more workers than projected in February, indicating the U.S. job market will keep expanding this year, according to a private report based on payrolls.
The 198,000 increase in employment followed a revised 215,000 gain the prior month that was more than initially estimated, figures from the Roseland, New Jersey-based ADP Research Institute showed today. The median forecast of 41 economists surveyed by Bloomberg called for an advance of 170,000.
Sustained hiring by businesses, even as lawmakers in Washington were sparring over budget reductions, signals there is enough demand to support consumer spending, the biggest part of the economy. A Labor Department report this week may show private payrolls rose by 167,000 last month, according to the Bloomberg survey median.
“The job market remains sturdy in the face of significant fiscal headwinds,” Mark Zandi, chief economist at Moody’s Analytics Inc., said in a statement. Moody’s produces the figures with ADP. “Businesses are adding to payrolls more strongly at the start of 2013 with gains across all industries and business sizes. Tax increases and government spending cuts don’t appear to be affecting the job market.”
Stock-index futures advanced, indicating the Dow Jones Industrial Average will extend its highest level ever. The contract on the Standard & Poor’s 500 Index expiring this month rose 0.4 percent to 1,543.7 at 8:41 a.m. in New York. Dow futures rose 57 points, or 0.4 percent.
Estimates in the Bloomberg survey for the ADP figure ranged from gains of 125,000 to 210,000. The prior month’s figure was revised from a previously reported increase of 192,000.
Goods-producing industries, which include manufacturers and construction companies, increased headcount by 34,000. Employment in construction rose by 21,000, while factories added 9,000 jobs.
Payrolls at service providers advanced by 164,000 in February.
Companies employing more than 499 workers added 57,000 jobs. Medium-sized businesses, with 50 to 499 employees, took on 65,000 and small companies increased payrolls by 77,000, the report showed.
ADP in October changed the method it had used to calculate its employment figures dating back to 2001. The report is now derived from a larger sample using a new methodology, and is released jointly with Moody’s of West Chester, Pennsylvania.
The Labor Department may report on March 8 that overall hiring, which includes government jobs, climbed 160,000 last month after rising 157,000 in January, according to the Bloomberg survey median. The jobless rate held at 7.9 percent, economists predicted.
Companies adding employment include Chrysler Group LLC, the automaker majority owned by Fiat SpA, which will invest about $374 million and add 1,250 jobs at Indiana factories to boost output of eight-and nine-speed transmissions. Chief Executive Officer Sergio Marchionne disclosed the investment in February.