The numbers: Private payrolls rose by 106,000 in January, according to the payroll services firm ADP on Wednesday. That is a significant drop from the revised 253,000 jobs added in December.
Economists polled by The Wall Street Journal had forecast a gain of 190,000 private sector jobs.
Key details: All the job gains were in the service-producing sectors. The goods -producing sector lost jobs in the month.
Leisure and hospitality added 95,000 worker in January. Financial activity added 30,000. Manufacturing added 23,000 jobs.
By company size, large businesses added 128,000 private-sector jobs in January while small businesses lost 75,000. Medium-sized businesses, defined as firms with 50 to 499 employees, added 64,000 jobs.
Annual pay is trending up 7.3% from a year ago, ADP said, the same rate as December.
Those changing jobs say a median change in annual pay accelerated to 15.4%.
Big picture: Firms seem to not be adding to their payrolls and layoffs are in the news but the labor market remains relatively healthy. Some economists are predicting that the job market will soften in coming months. That would be good news for the Federal Reserve that is trying to dampen inflationary pressures.
Economists expect the government to report on Friday that job growth expanded by a net 187,000 in January, down from 223,000 in the prior month.
What ADP said: “In January, we saw the impact of weather-related disruptions on employment during our reference week,” said Nela Richardson, chief economist of ADP. “Hiring was stronger during other weeks of the month, in line with the strength we saw late last year.”
What economists are saying: “On balance, we are skeptical this slowdown is primarily a temporary weather-related issue. Added to the weakness in activity, and the downturn in some forward-looking employment indicators like temporary employment and hours worked, it suggests that the easing in labor market conditions is gathering momentum,” Paul Ashworth, chief North America economist at Capital Economics.
Market reaction: Stocks
opened lower on Wednesday. The yield on the 10-year Treasury note
fell to 3.50%.
Leave a Reply