Private payrolls added 63,000 jobs in February in what payroll processing firm ADP described as a stronger month for job-stayers than job-changers.

The ADP National Employment Report for last month, released Wednesday, showed no pay gains for job-stayers last month, though there was growth of 4.5% year over year. The growth in pay for workers who were switching jobs was 6.3%, a record low.

Private employers’ modest hiring gains were concentrated among small firms with fewer than 20 employees, which added an estimated 58,000 jobs over the month. Medium-sized companies with 50 to 500 employees shed 7,000 jobs, while large companies with more than 500 employees added 10,000 positions.

“We’ve seen an increase in hiring and pay gains remain solid, especially for job-stayers,” said Nela Richardson, chief economist at ADP, in a statement accompanying the monthly data, which reflected pockets of strength as opposed to broad labor demand.

“But with hiring concentrated in only a few sectors, our data shows no widespread pay benefit from changing jobs,” Richardson added.

Hirings were concentrated in the services sector, with 47,000 net job additions in February. Goods-producing industries added 16,000 jobs, with 19,000 construction job additions offset by a loss of 5,000 in manufacturing.

The information service sector rebounded to add 11,000 jobs, complementing 58,000 jobs added in education and health services. Professional and business services firms deepened their December losses by shedding another 30,000 jobs last month.

ADP revised its initial January estimate of private payroll gains from 22,000 to 11,000.

With the next Federal Reserve meeting about interest rates quickly approaching on March 17-18, a U.S. job market that ended 2025 on tenuous footing continues facing pressures from tariffs and AI.

Heavily concentrated job gains in the education and health services industries skewed government-reported January job gains of 130,000 away from industries more widely linked to AI-related job disruptions like financial services.

January’s official employment report from the Bureau of Labor Statistics also included a massive revision to annual job gains in 2025, dropping previously estimated totals of 584,000 to just 181,000, for an average of approximately 15,000 monthly job gains.

With the government’s employment summary for February due out Friday, policymakers will be weighing above-target inflation against complicated outlooks for hiring growth, given uncertainties related to tariffs and a burgeoning war in Iran started by the U.S. and Israel.

Delivering remarks at an investor conference hosted by Bloomberg on Tuesday, Minneapolis Fed President Neel Kashkari said the duration of the war will ultimately determine the extent of its damage to inflation.

“Right now, it’s just too soon to know what imprint this has on inflation and for how long,” he told the audience, emphasizing that he believes it will have some impact even if the conflict is resolved quickly.