US labor market continues to be on track, no threat to job growth from fall in manufacturing employment

The US ADP employment report showed private payroll growth of 214k in February, as compared with consensus expectations of 190k and January's revised figure of 193k. Employers in the goods producing job added 5k to payrolls in February, as a third consecutive month of strong job growth in construction of 27k was restricted by manufacturing companies laying off employees.

"The decline in manufacturing employment is in keeping with other indicators of labor market trends for the sector and does not pose a major headwind to aggregate job growth, in our view", says Barclays.

The service-providing sector recorded a strong recovery in the hiring pace of 280k, as compared with January's revised print of 174k. The growth was mainly due to professional and business services that grew 59k. Trade, utilities and transportation companies experienced job growth consistent with recent trends at 20k, as compared with 26k in January, while financial activities employment growth decelerated to 8k, as compared with January's 18k.

"While we place limited weight on the ADP employment report given the frequent revisions to the time series, this report points to a rebound in nonfarm payroll growth in Friday's report; we maintain our outlook for a print of 200k", says Barclays.