Private Sector Adds 63,000 Jobs in February as Pay Premium for Job-Switchers Hits Record Low
ROSELAND, N.J. – The U.S. private sector saw its strongest month of hiring since last summer, adding 63,000 jobs in February, according to the latest ADP National Employment Report released Wednesday. While the headline number reflects a significant jump from a revised 11,000 jobs in January, the data reveals a labor market that is increasingly concentrated in specific sectors and less rewarding for those looking to change careers.
The February gain marks the best showing for private-sector job growth since July 2025. However, the growth was largely driven by just two areas: education and health services, which added 58,000 positions, and construction, which grew by 19,000.
A Cooling Trend for Job-Switchers
While hiring volume increased, the financial incentive to switch employers appears to be evaporating. Dr. Nela Richardson, ADP’s chief economist, noted that while pay gains remain “solid” for those staying in their current roles, the “pay premium” for switching jobs reached a record low in February.
“Hiring is concentrated in only a few sectors, and our data shows no widespread pay benefit from changing jobs,” Richardson said.
For “job-stayers,” annual pay growth held steady at 4.5%. Meanwhile, “job-changers” saw their annualized pay growth slow to 6.3%, narrowing the gap between those who stay and those who leave for new opportunities.
Industry and Regional Breakdown
The service-providing sector was the primary engine of growth, adding 47,000 jobs. Beyond the surge in healthcare and education, the information sector added 11,000 positions. However, these gains were offset by a sharp decline in professional and business services, which shed 30,000 jobs.
In the goods-producing sector, the 19,000 jobs added by construction were partially offset by a loss of 5,000 jobs in manufacturing.
Geographically, the South led the nation with 37,000 new jobs, followed by the West with 19,000. The Midwest saw a slight contraction, losing 4,000 positions over the month.
Small Businesses Lead the Charge
In a reversal of recent trends where large corporations dominated hiring, small establishments (1–49 employees) were the primary drivers of growth in February, adding 60,000 jobs. Large firms (500+ employees) added a modest 10,000, while medium-sized establishments actually saw a decrease in total headcount.
The report, produced by the ADP Research Institute in collaboration with the Stanford Digital Economy Lab, is based on payroll data from over 26 million U.S. workers. It serves as a closely watched precursor to the federal government’s official monthly employment report.
The next ADP National Employment Report is scheduled for release on April 1, 2026.