One would love to say the employment situation in the United States is starting to improve, but unfortunately it doesn't look like that occurred in February, if private payrolls are any indicator.

Non-farm private employment decreased by 697,000 in February -- worse than expected, ADP announced Wednesday in the ADP National Employment Report. In January, the private sector shed 522,000 jobs (pdf).

Manufacturing's contraction continues

The tell-tale stat in February: the manufacturing sector shed 338,000 jobs, the 26th straight monthly decline, while the services sector -- a strength during the recent economic expansion -- lost 359,000 jobs.

The job loss totals by business size: large -- 121,000; medium -- 314,000; small -- 262,000.

Economic Analysis: For investors, it's important to note that the ADP report surveys private sector conditions only. The more complete statistic, with both private and public sector job data, is the U.S. Labor Department's monthly payroll statistic, and the February data will be released Friday, March 6 at 8:30 a.m. EST. That report is expected to show a loss of 648,000 jobs, according to a Bloomberg News survey of economists.

That said, given that private payrolls declined by nearly 700,000, the February Labor Department data is likely to show a U.S. economy that continues to lose jobs at an alarming rate.

Further, it's all but impossible for corporate revenue and earnings to grow with job losses at these levels -- a factor that will continue to weigh on the U.S. stock market.

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