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US hiring solid in February, services sector accelerates: reports
WASHINGTON, March 5, 2020 (BSS/AFP) – Services industries that dominate the American economy accelerated again in February, despite growing concerns about the coronavirus epidemic, according to an industry survey released Wednesday.
A separate report showed hiring by private firms increased faster than expected last month, though US manufacturing slowed due to the interruption of supplies coming out of China, the Institute for Supply Management’s (ISM) non-manufacturing report showed.
“I’ve never seen as many comments on one topic as were on coronavirus,” ISM survey chief Anthony Nieves told reporters.
While he declined to pinpoint dates for the responses to the survey, he said ISM encourages executives to send in their comments as late in the month as possible.
ISM’s non-manufacturing index rose 1.8 points to 57.3 percent, the highest since February 2019, marking 121 months of expansion.
Meanwhile, the new orders index rose sharply to 63.1 percent, which bodes well for activity ahead, according to the survey.
Services is by far the largest segment of the US economy, and any reading of the ISM index above 50 indicates growth.
Most concerns of respondents were related to disruptions in the supply chain due to the virus outbreak, Nieves said, but he urged observers to keep the things in perspective.
“I’m not trying to downplay the severity,” he said, but “I think that as long as this does not continue to get to epic proportions within the domestic US we’ll be ok from (an) economic perspective.”
But economists warn the data may not fully reflect the virus impact.
“Before the deluge, everything was dry,” Ian Shepherdson of Pantheon Macroeconomics said.
Meanwhile, payroll services firm ADP reported that private hiring rose 183,000 last month, slightly below the staggering 209,000 in January which was the biggest gain since October 2018.
The services sector accounted for the vast majority of the gain, adding 172,000 positions, according to the report.
Mark Zandi, chief economist of Moody’s Analytics, who helped produce the report, said, “COVID-19 will need to break through the job market firewall if it is to do significant damage to the economy.”
“The firewall has some cracks, but judging by the February employment gain it should be strong enough to weather most scenarios.”
BSS/AFP/MMA/0918HRS