U.S. Private-Sector Job Gains Slowed in January on Weather-Related Disruptions, ADP Says

By Xavier Fontdegloria

Job creation in the U.S. lost momentum in January, mainly because of the hit from extreme weather over the month, data from the ADP National Employment Report showed Wednesday.

Employment in the nonfarm private sector rose by 106,000 in January, down from a 253,000 increase in December, ADP said. December's gain was upwardly revised from an initial estimate of 235,000.

Economists polled by The Wall Street Journal expected a gain of 190,000 payrolls.

The slowdown in hiring was attributed to the impact of weather-related disruptions during the reference week, said Nela Richardson, chief economist at ADP. "Hiring was stronger during other weeks of the month, in line with the strength we saw late last year," she said.

The ADP estimate is based on aggregated payroll data of more than 25 million U.S. workers and is independent from the Labor Department official data. The ADP series can diverge considerably from the Labor Department's data.

Small businesses lost 75,000 jobs over the month. This decline was more than offset by a 64,000 employment increase in medium-sized businesses and a 128,000 gain for large businesses, the data showed.

By sector, services providers drove hiring, with 109,000 new jobs, 95,000 of which were created in the leisure and hospitality sector. Goods producers shed on average 3,000 jobs, weighed by a 24,000 loss in the construction sector.

Annual wage growth stabilized at the beginning of the year at 7.3%, according to the survey. Pay data is based on the salaries of almost 10 million individual employees over a 12-month period.

The U.S. Labor Department is expected to release its employment report Friday. Economists polled by The Wall Street Journal expect nonfarm payrolls to increase by 187,000 in January, and the unemployment rate is forecast to edge up to 3.6% from December's 3.5%.

Write to Xavier Fontdegloria at [e-mail]

(END) Dow Jones Newswires

February 01, 2023 08:57 ET (13:57 GMT)

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