The United States’ private firms added 63,000 jobs in February, rebounding from a revised 11,000 in January, as hiring was driven mainly by education, health services and construction, according to payroll processor Automatic Data Processing (ADP).

ADP said companies added a seasonally adjusted 63,000 workers during the month, beating the Dow Jones estimate of 48,000. January’s figure was revised down to 11,000.

Despite the improvement, job growth remained concentrated in a few sectors.

Education and health services added 58,000 jobs, leading all industries. Construction followed with 19,000 new positions. Most other sectors recorded limited growth or declines.

Professional and business services lost 30,000 jobs. Manufacturing shed 5,000, while trade, transportation and utilities declined by 1,000. Information services gained 11,000. Manufacturing continued to contract despite President Donald Trump’s push to use tariffs to bring jobs back to the sector.

On wages, pay for workers who stayed in their roles rose by 4.5%, unchanged from January. For those changing jobs, wage growth slowed to 6.3%, down 0.3 percentage points from the previous month. ADP said this reduced the incentive to switch jobs to the lowest level since it began tracking the measure.

“We’ve seen an increase in hiring and pay gains remain solid, especially for job-stayers,” said ADP chief economist Nela Richardson. “But with hiring concentrated in only a few sectors, our data shows no widespread pay benefit from changing jobs.”

Small businesses with fewer than 50 employees accounted for most of the gains, adding 60,000 jobs. Large firms with 500 or more workers added 10,000, while medium-sized companies cut 7,000 positions.

Hiring has slowed over the past year as the administration tightened immigration policy and post-pandemic demand eased. Companies have remained cautious about expanding payrolls, though layoffs have stayed low.

Treasury Secretary Scott Bessent told CNBC that the rise in construction jobs reflects a “technology-driven productivity boom”.

“I am very, very bullish on the jobs market this year,” Bessent said.

Recent comments from officials at the Federal Reserve suggest growing confidence that the labour market is stabilising. However, concerns remain that higher oil prices linked to tensions in the Middle East could push inflation higher.

Markets now expect the next interest rate cut to come no earlier than July, with reduced chances of a second cut this year, according to CME Group’s FedWatch tracker.

The ADP report comes ahead of Friday’s nonfarm payrolls data from the Bureau of Labor Statistics, which also includes government hiring. Economists expect a gain of 50,000 jobs In February and forecast the unemployment rate to remain at 4.3%. (CNBC)