Hospitality and Finance Sectors Lead February Job Growth

Private employers added 242,000 jobs in February, led by the hospitality and finance sectors.

Those industries saw growth of 83,000 and 62,000 jobs, respectively, while annual pay was up 7.2% year over year, the ADP Research Institute reported Wednesday (March 8).

“There is a tradeoff in the labor market right now,” APD Chief Economist Nela Richardson said in a news release. “We’re seeing robust hiring, which is good for the economy and workers, but pay growth is still quite elevated. The modest slowdown in pay increases, on its own, is unlikely to drive down inflation rapidly in the near-term.”

The pay growth rate was the slowest pace of gains in 12 months, ADP said. Pay growth slowed for people changing jobs as well, dropping from 14.9% to 14.3%.

That’s somewhat bad news for the paycheck-to-paycheck consumers who — according to recent PYMNTS research — expect their financial situation to improve this year due to job changes or improvements.

The news comes days after a report that showed that businesses in the hospitality sector — the country’s bars, restaurants and hotels — represent the fastest-growing employers in the U.S., helping lead to the lowest unemployment rate in decades.

A report by the Wall Street Journal (WSJ) Sunday (March 5) said the leisure-and-hospitality industry is rebuilding its workforce as the tech sector contracts.

And because these companies make up a larger number of jobs than the tech industry, it’s caused a shift in hiring patterns, leading to a tight labor market.

“The sectors that are seeing above-average layoffs are those that saw explosive growth after the pandemic,” ZipRecuriter Chief Economist Julia Pollak told the WSJ, in reference to the tech and information sector.

In addition to the hospitality and finance industries, ADP’s report says the other sectors driving job growth included manufacturing (which added 43,000 jobs) and education/health (35,000).

Two of the sectors ADP monitors lost jobs: construction, which was down 16,000 jobs, and professional/business services, down 36,000.

PYMNTS looked at some of the pressures facing the construction industry last week, as firms facing falling housing starts and increased rising mortgage rates that are turning off potential buyers are increasingly turning to digital payment solutions.

This is explored in greater detail in “Building Better Cash Flow In Construction With Digital Payments,” a PYMNTS and American Express collaboration, and the January/February edition of the B2B and Digital Payments Tracker® Series, which look at the pressures construction firms face and how digital tools help ease those pain points.

“Getting paid on time is a major roadblock in the construction industry, disrupting cash flow for U.S. construction professionals,” the report said. “Only 11% of construction professionals say they are paid in full on every job, and the impacts can be devastating.”