NEW YORK (Reuters) - U.S. private employment fell unexpectedly for the first time in nearly five years in February, according to a private report on Wednesday that dealt another blow to an economy teetering on the brink of recession.
The fall of 23,000 jobs compares with a downwardly revised 119,000 jobs added in January, according to the report by ADP Employer Services.
February’s fall was the biggest drop since April 2003.
The ADP report was expected to show 20,000 new private-sector jobs in February, according to the median of estimates from 30 economists surveyed by Reuters.
February’s decline was the first monthly contraction in private employment since June 2003, according to the ADP data, and does not bode well for Friday’s monthly jobs report by the government. Analysts expect that to show a rise of 25,000 in February non-farm payrolls.
However, the 82 estimates for the payrolls report range widely from a drop of 110,000 to a rise of 100,000.
“The ADP seemed to confirm what the market had already suspected, which is that payrolls would decline moderately in February,” said Cary Leahey, economist and managing director at Decision Economics in New York.
“Even though the consensus estimate was for a small increase, in some sense, the market may have expected even a larger decline.”
U.S. S&P 500 stock futures pared their gains after the ADP employment report. The dollar also trimmed its gains versus the yen, while U.S. government bonds, which usually benefit from signs of economic weakness, added to their earlier gains.
The ADP report was jointly developed with Macroeconomic Advisers LLC.
Reporting by Burton Frierson; additional reporting by Ellen Freilich; Editing by Tom Hals