March 3 (Bloomberg) -- U.S. companies in February cut the fewest jobs in two years, according to data from a private report based on payrolls. The 20,000 decline followed a revised 60,000 drop the prior month, data from ADP Employer Services showed today. ADP figures overstated the Labor Department’s estimate of private payroll losses by a total of 30,000 in January and December, and 308,000 the previous four months.
Companies are hesitant to add workers until they see sustained gains in sales as the U.S. emerges from the worst recession since the 1930s. Economists surveyed by Bloomberg News anticipate the government’s report March 5 will show U.S. payrolls declined by 50,000, in part because snowstorms in parts the country caused some businesses to close.
“U.S. employment is still in transition from recession to recovery,” Chris Low, chief economist at FTN Financial in New York, said before the report. “We remain confident the job market will continue to improve in 2010, but not in February.”
The ADP figures were forecast to show a decline of 20,000 jobs, according to the median estimate of 31 economists surveyed by Bloomberg. Projections ranged from a loss of 150,000 to a 25,000 gain.
Weather’s Influence
Most economists agree the severe winter storms in February will probably depress the Labor Department’s payroll figures. There is disagreement on whether the ADP data was similarly influenced. Analysts at Goldman Sachs Group Inc. said in a note this week that their models show the ADP data is affected by weather.
ADP includes only private employment and doesn’t take into account hiring by government agencies. Macroeconomic Advisers LLC in St. Louis produces the report jointly with ADP.
Employers last month announced the fewest job cuts in more than three years, according to a report today by the job placement firm Challenger, Gray & Christmas Inc. Planned firings fell 77 percent in February to 42,090, the least since July 2006, from 186,350 a year earlier, the Chicago-based company said. Announcements decreased from 71,482 in January.
The Labor Department’s report in two days is forecast to show the unemployment rate climbed to 9.8 percent in February, the first increase since October, from 9.7 percent the previous month, according to the Bloomberg survey median.
The economy has lost 8.4 million jobs since the recession began in December 2007, the most of any downturn in the post- World War II era. In January, U.S. payrolls unexpectedly shrank by 20,000.
