March 5 (UPI) -- Private payroll growth in February came in well short of expectations, according to private payroll processor ADP's monthly report.
According to ADP, 77,000 private sector jobs were created in February and annual pay was up 4.7%. That was the smallest job growth since July.
It was far below the Dow Jones consensus expectation that 170,000 private sector jobs would be created in February amid worries that U.S. tariffs on Mexico, Canada and China will fuel more inflation.
"Policy uncertainty and a slowdown in consumer spending might have led to layoffs or a slowdown in hiring last month," said ADP chief economist Nela Richardson in a statement. "Our data, combined with other recent indicators, suggests a hiring hesitancy among employers as they assess the economic climate ahead."
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Goods production, which includes mining and construction as well as manufacturing, created 42,000 jobs. The service sector created 36,000 jobs in February.
There are rising fears among both consumers and business executives that the tariffs will hike prices while curbing economic growth, which could lead to stagflation.
Construction added the most goods-producing jobs with 26,000.
On the service side leisure and hospitality added the most jobs at 41,000.
By region, the Midwest created the most jobs in February with 56,000 created followed by the Northeast's 55,000.
The West lost 27,000 jobs and the South lost 12,000 private sector jobs according to ADP.
Trade and transportation, health care and education and information all showed private sector job losses.
Annual media pay was up 4.7% for people who stayed in their jobs and pay increased 6.7% for workers who changed jobs.
