The private sector employment in the United States added 63,000 jobs in February, exceeding expectations, but it was all thanks to two major industries.

ADP released a report on Wednesday stating that private sector hiring in the United States in February slightly exceeded expectations, but the increase in new jobs was highly concentrated in two major industries, raising structural concerns. The latest data from the payroll giant shows that in February, private businesses added 63,000 new employees after seasonal adjustments, a significant improvement from the revised figure of 11,000 in January, and higher than the Dow Jones consensus expectation of 48,000. Despite the total exceeding expectations, the issue of lack of breadth in employment continues to plague the labor market. The education and healthcare industry, the main driver of employment growth, added 58,000 new positions in February, far ahead of other industries. The construction industry contributed 19,000 jobs, almost offsetting the stagnation in most other industries. Professional and business services saw a sharp decline of 30,000 positions, manufacturing lost 5,000 jobs, and trade, transportation, and utilities decreased by 1,000. Apart from the information services industry adding 11,000 people, there was little change in other industries. Despite efforts by President Trump to bring back manufacturing jobs through tariffs, the industry continues to shrink. In terms of wages, the annual growth rate for incumbent workers was 4.5%, unchanged from January. However, the wage increase for job switchers decreased to 6.3%, a 0.3 percentage point decrease from the previous month. This has narrowed the wage premium brought by switching jobs to the lowest level since ADP began tracking the indicator. ADP's chief economist Nela Richardson said: "Hiring has picked up, wage growth remains steady, especially for incumbent workers. But new job growth is concentrated in a few industries, and data shows that job switching no longer brings a universal wage advantage." Unlike the past few months, February saw job growth concentrated in small businesses with fewer than 50 employees. This group added 60,000 positions, while large enterprises with over 500 employees only increased by 10,000 and medium-sized enterprises decreased by 7,000. With the Trump administration cracking down on illegal immigration and the slowing pace of hiring in the post-pandemic era, employment growth has significantly cooled over the past year. Although the willingness of companies to increase staffing is not high, the scale of layoffs remains low. As this report comes out, the labor market situation and persistent inflation risks have attracted attention - the latter heightened by events in Iran and the Middle East. Recent statements by Federal Reserve officials indicate that the decision-making level is more confident in the stabilization of the job situation. Meanwhile, concerns about rising oil prices potentially pushing up inflation are also growing. CME FedWatch data shows that traders currently expect the Fed to cut interest rates for the first time in July, and the probability of two cuts within the year has decreased. Following the release of ADP data, the Bureau of Labor Statistics is set to release the nonfarm payroll report on Friday. The market expects a addition of 50,000 new nonfarm jobs in February, a report that differs from ADP's as it includes government hiring. Economists predict that the unemployment rate will remain steady at 4.3%.