US labour market firms as Fed rate-cut odds recede

Washington [US], March 7: U.S. private payrolls increased by the most in seven months in February, though data for the prior month was ​revised sharply lower, the ADP's national employment report showed on Wednesday.
Private employment rose by 63,000 jobs last month, the largest gain since July 2025, after a downwardly revised 11,000 increase in January. Economists polled by Reuters had forecast private employment would rise by 50,000 jobs after a previously reported gain of 22,000 in January.Employment ​gains continued to be concentrated in the education and health services sector, which added 58,000 ​jobs. Construction payrolls increased by 19,000 jobs, but manufacturing shed 5,000 positions.
The ADP report, jointly developed with the Stanford Digital Economy Lab, was published ahead of the release on Friday ​of the US Bureau of Labor Statistics' employment report for February. ADP has been a poor predictor ​of the BLS' private payrolls estimate.
Nonfarm payrolls likely increased by 59,000 jobs in February after accelerating by 130,000 in January, a Reuters survey of economists predicted. Private payrolls are forecast to have risen by 65,000 jobs after advancing by 172,000 ​in January. The unemployment rate is expected to have held steady at 4.3 percent. The labor market has stabilized ​after wobbling last year amid uncertainty that economists blamed on import tariffs.
The USSupreme Court last month struck down President Donald Trump's sweeping tariffs, which he pursued under a law meant for use in national emergencies. Trump quickly imposed a 10 percent global tariff for 150 days to replace some of the emergency duties, and later said they would be raised to 15 percent.
Labor market stability and still-high inflation are expected to encourage the Federal Reserve to ​keep interest rates unchanged ​at its policy meeting later this month. Oil and natural gas prices have shot up due to the US-Israeli air war with Iran.
The conflict prompted traders to dial back their rate-cut expectations for ​this year amid concerns that it could faninflation.The odds of ​a rate cut at the Fed's June 16-17 meeting have greatly diminished. The US central bank left its benchmark overnight interest rate in the 3.5 percent-3.75 percent range at its meeting in January.
The ADP report also showed wage inflation was steady last month. ​The annual increase in wages for workers remaining in their ​jobs was unchanged at 4.5 percent. Wage growth for those changing jobs eased to 6.3 percent from 6.4 percentin January.
Source: Qatar Tribune