ADP report shows increase of 217,000 jobs last month

In January, the unemployment rate dropped from 9.4 percent to 9 percent although the economy added only 36,000 workers, the fewest in four months. 

ADP said service jobs increased by 202,000 and employment at factories grew by 20,000. Construction jobs fell by 9,000 and financial services jobs were unchanged, it said.

By contract, a separate report said employers planned to cut more than 50,000 jobs, up 32 percent from a month earlier and the highest total since last March, according to Challenger, Gray & Christmas Inc. 

“Despite the February surge, the pace of job cutting remains relatively subdued,” the firm said. “The two-month job-cut total of 89,211 [for January and February] is 21 percent lower than the 113,572 job cuts” announced in first two months of 2010.

A report from the Federal Reserve in its “beige book” report showed that the economy continued to to grow “at a modest to moderate pace” in January and February, with the housing market possibly getting some traction, according to officials from the 12 Federal Reserve Banks.

In addition, the Fed officials all reported some level of improvement in their districts’ labor markets.

ADP’s reports have missed the mark on the government’s payrolls in the past six months. In November, for example, ADP was closest to the Labor Department report when it overestimated the gain in jobs by 43,000. And the firm was the least accurate in December, overestimating the gain by 184,000. 

The ADP report shows that companies employing more than 499 workers added 13,000 jobs, medium-sized businesses (50 to 499 employees) created 104,000 jobs and small companies increased payrolls by 100,000.

The ADP report is based on data from about 340,000 businesses employing more than 21 million workers.