By Geoffrey Smith
Investing.com -- The U.S. labor market is still refusing to slow down meaningfully.
Private-sector payrolls grew some 242,000 in the month through mid-February, according to a survey by payrolls processor ADP (NASDAQ:ADP) released on Wednesday. That was 40,000 - or 20% - above expectations and more than twice January's rate of 119,000 (a number that was also revised higher from initial estimates).
The numbers are further evidence to suggest that the economy is still far from the recession that many expect, despite a succession of sharp interest rate rises last year by the Federal Reserve.
Richmond Fed President Tom Barkin was quoted by newswires Wednesday as saying that the "labor market has been extraordinarily resilient."
The numbers add to a body of employment and inflation data over recent weeks that have all come out stronger than seemed likely at the end of last year. Those data have formed the context for Federal Reserve chair Jerome Powell's warning on Tuesday that the central bank may revert to larger rate hikes in its fight to tame inflation, having slowed the pace of tightening at its last two policy meetings.
"We're seeing robust hiring, which is good for the economy and workers, but pay growth remains quite elevated," ADP's chief economist Nela Richardson said in a statement, adding that "the modest slowdown in pay increases, on its own, is unlikely to drive down inflation rapidly in the near-term."
According to ADP's calculations, the median wage across a sample size of 10 million people grew by 7.2% in the 12 months through February (for those who didn't change their job in that time). While that's the slowest growth in 12 months, it's still well above official data for average hourly earnings and unlikely to be viewed positively by the Fed. Even more unsettling is that wages for those who changed jobs were able to raise their income by 14.3%. That rate, too, is declining - but only gently. It had peaked at 16.4% in June.