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Private payrolls up 217,000 in February, payroll firm says

The increase beats expectations for the Automatic Data Processing report. Payrolls rose 104,000 at medium-size firms, 100,000 at small firms and 13,000 at large businesses.

March 02, 2011|By Ruth Mantell

WASHINGTON — U.S. private-sector employment jumped in February, and the recent pace of gains has been speeding up, according to an employment report released Wednesday.

Private-sector employment rose 217,000 in February, increasing 104,000 at medium-size businesses, 100,000 at small businesses and 13,000 at large businesses.

By sector, service-producing employment rose 202,000, while goods-producing employment gained 15,000.

A total increase of 180,000 was expected for the February report from payroll company Automatic Data Processing Inc.

The report "suggests continued solid growth of nonfarm private employment early in 2011," said Joel Prakken, chairman of Macroeconomic Advisers, which works on the report.

Prakken noted that the speed of gains is rising: From December through February, the average gain was more than 200,000, compared with an average of slightly more than 60,000 over the prior six months.

"We view these data as corroborating the message of stronger job creation from the decline in jobless claims, the improvement in consumers' perceptions of labor-market conditions and the jump in the employment components of manufacturing surveys," analysts at RDQ Economics wrote in a research note.

For January, ADP reported that private payrolls rose 189,000, compared with a prior estimate of 187,000. In January, the ADP data didn't track the Labor Department's report particularly closely, as the U.S. government's own estimate for private payrolls was 50,000. Macroeconomic Advisers used a sample of payrolls for about 340,000 U.S. firms to compute the data in the ADP report.

On Friday, the government will report February's nonfarm payrolls, which also include government workers. Economists polled by MarketWatch are looking for a gain of 200,000 and an unemployment rate of 9.1%.

For January, the government reported that nonfarm payrolls gained 36,000, while the unemployment rate fell to 9%.

"Weather and other technical factors that held back the job count in January should reverse in February and add to an improving fundamental picture," wrote Credit Suisse analysts in a research note before the release of the ADP data.

Mantell writes for MarketWatch.com/McClatchy.

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