Connect with us

Economics

ADP jobs report February 2025:

Published

on

A person exits a Home Depot store in Midtown Manhattan on February 26, 2025 in New York City. 

Eduardo Munoz Alvarez | Corbis News | Getty Images

Private sector job creation slowed to a crawl in February, fueling concerns of an economic slowdown, payrolls processing firm ADP reported Wednesday.

Companies added just 77,000 new workers for the month, well off the upwardly revised 186,000 in January and below the 148,000 Dow Jones consensus estimate, according to seasonally adjusted figures from ADP.

The total was the smallest increase since July and comes at a time when worries are rising that economic growth is slowing and worries brew that President Donald Trump’s tariff plans will spark another round of inflation. ADP said annual pay rose 4.7% in February, the same as the prior month.

“Policy uncertainty and a slowdown in consumer spending might have led to layoffs or a slowdown in hiring last month,” said ADP chief economist Nela Richardson. “Our data, combined with other recent indicators, suggests a hiring hesitancy among employers as they assess the economic climate ahead.”

Though most economic data points remain positive, sentiment indicators have shown rising fears among both business executives and consumers that the Trump tariffs could raise prices and slow growth. In the extreme scenario, the combination could cause stagflation, a condition of flat or negative growth and rising prices.

The ADP report reflected some of those concerns, as a sector that lumps together trade, transportation and utility jobs saw a loss of 33,000 positions. Education and health services reported a decline of 28,000, while information services decreased by 14,000 at a time of uncertainty for artificial intelligence-related companies, despite Trump’s commitment to advancing AI efforts.

On the positive side, leisure and hospitality jobs jumped by 41,000, while professional and business services added 27,000 and financial activities and construction both saw gains of 25,000. Manufacturing also reported an increase of 18,000, countering the ISM manufacturing survey for the month that indicated companies were pulling back on hiring.

Services and goods-producing were in unusual balance for the month, adding 36,000 and 42,000 respectively on the month. As the U.S. is a services-based economy, that side usually dominates in job creation.

Employment growth tilted towards large firms in February, with companies employing 500 or more workers reporting a gain of 37,000 while those with fewer than 50 employees saw a loss of 12,000.

The ADP count serves as a precursor to the Labor Department’s Bureau of Labor Statistics report on nonfarm payrolls, due Friday. However, the two reports can differ substantially due to different methodologies. In January, the BLS reported an increase of just 111,000 in private payrolls, well below the ADP count.

Economists surveyed by Dow Jones expect Friday’s report to show job gains of 170,000 and an unemployment rate steady at 4%.

Economics

Why the president must not be lexicographer-in-chief

Published

on

Who decides what legal terms mean? If it is Donald Trump, God help America

Continue Reading

Economics

Inflation rate slipped to 2.1% in April, lower than expected, Fed’s preferred gauge shows

Published

on

Inflation rate slipped to 2.1% in April, lower than expected, Fed’s preferred gauge shows

Inflation barely budged in April as tariffs President Donald Trump implemented in the early part of the month had yet to show up in consumer prices, the Commerce Department reported Friday.

The personal consumption expenditures price index, the Federal Reserve’s key inflation measure, increased just 0.1% for the month, putting the annual inflation rate at 2.1%. The monthly reading was in line with the Dow Jones consensus forecast while the annual level was 0.1 percentage point lower.

Excluding food and energy, the core reading that tends to get even greater focus from Fed policymakers showed readings of 0.1% and 2.5%, against respective estimates of 0.1% and 2.6%.

Consumer spending, though, slowed sharply for the month, posting just a 0.2% increase, in line with the consensus but slower than the 0.7% rate in March. A more cautious consumer mood also was reflected in the personal savings rate, which jumped to 4.9%, up from 0.6 percentage point in March to the highest level in nearly a year.

Personal income surged 0.8%, a slight increase from the prior month but well ahead of the forecast for 0.3%.

Markets showed little reaction to the news, with stock futures continuing to point lower and Treasury yields mixed.

People shop at a grocery store in Brooklyn on May 13, 2025 in New York City.

Spencer Platt | Getty Images

Trump has been pushing the Fed to lower its key interest rate as inflation has continued to gravitate back to the central bank’s 2% target. However, policymakers have been hesitant to move as they await the longer-term impacts of the president’s trade policy.

On Thursday, Trump and Fed Chair Jerome Powell held their first face-to-face meeting since the president started his second term. However, a Fed statement indicated the future path of monetary policy was not discussed and stressed that decisions would be made free of political considerations.

Trump slapped across-the-board 10% duties on all U.S. imports, part of an effort to even out a trading landscape in which the U.S. ran a record $140.5 billion deficit in March. In addition to the general tariffs, Trump launched selective reciprocal tariffs much higher than the 10% general charge.

Since then, though, Trump has backed off the more severe tariffs in favor of a 90-day negotiating period with the affected countries. Earlier this week, an international court struck down the tariffs, saying Trump exceeded his authority and didn’t prove that national security was threatened by the trade issues.

Then in the latest installment of the drama, an appeals court allowed a White House effort for a temporary stay of the order from the U.S. Court of International Trade.

Economists worry that tariffs could spark another round of inflation, though the historical record shows that their impact is often minimal.

At their policy meeting earlier this month, Fed officials also expressed worry about potential tariff inflation, particularly at a time when concerns are rising about the labor market. Higher prices and slower economic growth can yield stagflation, a phenomenon the U.S. hasn’t seen since the early 1980s.

Continue Reading

Economics

German inflation May 2025

Published

on

19 May 2025, Berlin: Apricots are sold at a greengrocer for 7.98 euros per kilogram. Grapes and papaya are also on offer.

Photo by Jens Kalaene/picture alliance via Getty Images

Germany’s annual inflation hit 2.1% in May approaching the European Central Bank’s 2% target but coming in slightly hotter than analyst estimates, preliminary data from statistics office Destatis showed Friday.

The print compares with a 2.2% reading in April and with a Reuters projection of 2%.

The print is harmonized across the euro zone for comparability.

So-called core inflation, which strips out more volatile food and energy prices, dipped slightly from April’s 2.8% to 2.9% in May. The closely watched services print meanwhile eased sharply, coming in at 3.4% compared to 3.9% in the previous month.

Energy prices fell markedly for the second month in a row, tumbling by 4.6% in May.

Germany’s consumer price index has been closing in on the European Central Bank’s 2% target over recent months, in a positive signal amid ongoing uncertainty about the economic outlook for Europe’s largest economy.

Domestic and global issues have mired expectations for Germany’s financial future.

One the one hand, U.S. President Donald Trump’s tariffs could damage economic growth, given Germany’s status as an export-reliant country, though the potential impact of such duties on inflation remains unclear. But frequent policy shifts and developments have been muddying the picture.

On the other hand, Germany’s newly minted government is starting to get to work and has made the economy a top priority. Questions linger about when and to what extent the new Berlin administration’s policy plans might be realized.

The ECB is set to make its next interest rate decision on June 5, with traders last pricing in an over 96% chance of a quarter point interest rate reduction, according to LSEG data. Back in April, the central bank had cut its deposit facility rate by 25 basis points to 2.25%.

This is a breaking news story, please check back for updates.

Continue Reading

Trending