Job creation took a step back in February as private companies added 183,000 jobs, which fell just below the 185,000 expected by Dow Jones estimates, according to a report on Wednesday from ADP and Moody’s analytics.
The report did revise January’s numbers, raising the original estimate of 213,000 to 300,000–40.8 percent higher. According to Mark Zandi, chief economist at Moody’s Analytics, the labor market may be reaching a pinnacle soon if it hasn’t already.
“The economy has throttled back, and so too has job growth,” Zandi said in a statement. “Job gains are still strong, but they have likely seen their high watermark for this expansion.”
2019 has seen U.S. equities bounce back after a volatility-laden fourth quarter in 2018, but traders are dialing back their inflation bets, which sends a message of skepticism that continued growth through 2019 is sustainable.
A mix of data regarding manufacturing, business confidence and consumer data have tempered growth prospects, which has prevented inflation from going past the 2 percent target the Federal Reserve set. 2018 marks the seventh year inflation hasn’t gone past this target.
Earlier this year, the International Monetary Fund (IMF) lowered its global growth forecast, pointing to ongoing trade wars dampening China’s economic outlook as well as rising interest rates in the United States. The IMF trimmed its growth expectations to 3.5 percent from 3.7 percent, while global growth outlook for 2020 was also cut to 3.6 percent from 3.7 percent.
Midsized Companies a Strong Performer
The amount of unemployed, which includes 6.3 million in December, continues to come under the amount of job openings, still signifying a strong labor market. Additionally, monthly nonfarm payroll gains are currently averaging 240,000 the past three months, which represents the fastest pace since the middle of 2016.
According to the ADP and Moody’s report, the highest number of jobs were created in the professional and businesses services sector with 49,000. Construction came in second with 25,000, while positions on Wall Street rose by 21,000 and manufacturing gained 17,000.
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Midsized companies saw the most job creations with 95,000, while large businesses added 77,000 and small businesses were up 12,000.
“Midsized companies have been the strongest performer for the past year,” said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute. “There was a sharp decline in small business growth as these firms continue to struggle with offering competitive wages and benefits.”
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