US private sector job growth misses January expectations
Private sector hiring in the United States in January rose less than analysts expected, payroll firm ADP said Wednesday, with the manufacturing industry leading the slowdown.
Private employers added 22,000 jobs last month, significantly below the 45,000 that analysts had forecast.
Wednesday’s number was also below December’s revised level of 37,000.
ADP released the figures as concerns about the labor market simmer in the world’s biggest economy, with the overall unemployment rate creeping up in the second half of last year.
Wednesday’s report will likely be the main snapshot of the jobs market in January for now, as a partial federal shutdown delayed a US government publication on jobs originally set for Friday.
The Labor Department has rescheduled the release of this employment report for February 11, now that the stoppage has ended.
January was a “lackluster month for hiring,” ADP said.
Education and health services added a significant number of jobs, but manufacturing lost 8,000 positions.
The report said that the manufacturing sector “has lost jobs every month since March 2024.”
Among employers, job losses were seen in both small and major establishments in January.
“Hiring remains concentrated in the services sector, with goods-producing industries lagging behind,” said economist Matthew Martin of Oxford Economics.
He added that signs of stabilization for now could allow the Federal Reserve to keep interest rates unchanged until midyear, rather than bring forward more rate cuts to support the market.
“Job creation took a step back in 2025, with private employers adding 398,000 jobs, down from 771,000 in 2024,” said ADP chief economist Nela Richardson.
She said there was a “continuous and dramatic slowdown in job creation for the past three years,” even though wage growth has been steady.
Wage growth for those who remained in their roles was little-changed in January, at 4.5 percent year-on-year.
For those who shifted jobs, their annualized pay growth cooled from 6.6 percent to 6.4 percent, ADP said.
The health of the labor market is among key factors the Fed considers as it adjusts interest rates.
The US central bank made three rate cuts last year with an eye on weakening employment, but has held off more reductions for now.
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