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The numbers: American businesses added 140,000 new jobs in February, paycheck company ADP said, in a sign demand for labor might be slackening after a frenzy of hiring last year.

Economists polled by the Wall Street Journal had forecast a gain of 150,000.

The ADP payroll estimate, it should be kept in mind, is not an accurate predictor of the government’s official employment report that follows a few days later.

The ADP report has shown a bigger slowdown in hiring than the government, but both surveys do move in the same direction over time.

The government on Friday is expected to report that 198,000 new jobs were created in February, including government workers. ADP only tracks the private sector.

Key details: ADP said most of the new jobs in February were created at restaurants and hotels, construction firms, and in transportation and the financial-services sector.

Big and medium-sized companies did most of the hiring. Small business employment barely rose.

Employment fell slightly in information, a sector that includes the media.

The increase in employment in January was revised down to 107,000 from 111,000.

Workers who’ve stayed in the same job earned a 5.1% increase in pay in the 12 months ending in January, ADP said. That’s the lowest level since mid-2021 and reflects a downward trend in the past year.

MarketWatch Live: Follow Jerome Powell’s testimony — and market reactions — here.

Big picture: The labor market has shown some fraying around the edges, but it’s hard to characterize it as anything but strong.

The Federal Reserve would be happy if unemployment stays low, but senior officials want wage growth to slow further to make it easier to get inflation back down to low prepandemic levels.

The Fed is expected to cut interest rates later this year. More slack in the labor market could speed up its decision.

Looking ahead: “Job gains remain solid. Pay gains are trending lower but are still above inflation,” said Nela Richardson, chief economist of ADP. “In short, the labor market is dynamic, but doesn’t tip the scales in terms of a Fed rate decision this year.”

Market reaction: The Dow Jones Industrial Average DJIA and S&P 500 SPX were set to open rise in Wednesday trading ahead of congressional testimony by Fed Chairman Jerome Powell.

Stocks sank on Tuesday ahead of his remarks.

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