U.S. private payrolls increased by the most in seven months in February, though data for the prior month was revised sharply lower, the ADP national employment report showed Wednesday.

Private employment rose by 63,000 jobs last month, the largest gain since July 2025, after a downwardly revised 11,000 increase in January.

Economists polled by Reuters had forecast private employment would rise by 50,000 jobs after a previously reported gain of 22,000 in January.

Employment gains continued to be concentrated in the education and health services sector, which added 58,000 jobs. Construction payrolls increased by 19,000 jobs, but manufacturing shed 5,000 positions.

The ADP report, jointly developed with the Stanford Digital Economy Lab, was published ahead of the release on Friday of the U.S. Bureau of Labor Statistics' employment report for February.

Nonfarm payrolls likely increased by 59,000 jobs in February after accelerating by 130,000 in January, a Reuters survey of economists predicted. Private payrolls are forecast to have risen by 65,000 jobs after advancing by 172,000 in January. The unemployment rate is expected to have held steady at 4.3%.

The labor market has stabilized after wobbling last year amid uncertainty that economists blamed on import tariffs.

The U.S. Supreme Court last month struck down President Donald Trump's sweeping tariffs, which he pursued under a law meant for use in national emergencies. Trump quickly imposed a 10% global tariff for 150 days to replace some of the emergency duties, and later said they would be raised to 15%.

Labor market stability and still-high inflation are expected to encourage the Federal Reserve to keep interest rates unchanged at its policy meeting later this month.

Oil and natural gas prices have shot up due to the U.S.-Israeli air war with Iran. The conflict prompted traders to dial back their rate-cut expectations for this year amid concerns that it could fan inflation.

The odds of a rate cut at the Fed's June 16-17 meeting have greatly diminished. The U.S. central bank left its benchmark overnight interest rate in the 3.50%-3.75% range at its meeting in January

The ADP report also showed wage inflation was steady last month. The annual increase in wages for workers remaining in their jobs was unchanged at 4.5%.

Wage growth for those changing jobs eased to 6.3% from 6.4% in January.