Private payroll growth slowed to 106,000 in January as weather hit jobs, ADP says

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Private payroll growth slowed to 106,000 in January as weather hit jobs, ADP says


On Monday, January 23, 2023 in New Jersey, USA, heavy rains hit Edgewater, New Jersey, causing flooding.

Fatih Law | Anadolu Agency | Getty Images

Private sector job creation plummeted in January as weather-related problems pushed workers to the sidelines, payroll processing firm ADP reported Wednesday.

Companies added just 106,000 new workers in the month, up from 253,000 revised upwards the previous month. Economists surveyed by Dow Jones were seeking a profit of 190,000.

Most of the increase occurred in the hospitality industry as bars, restaurants, hotels and others added 95,000 positions. Other growth industries include financial activities (30,000), manufacturing (23,000), and education and health services (12,000).

However, the trade, transport and public works sector lost 41,000, construction decreased 24,000, and natural resources and mining decreased 3,000.

Overall, 3,000 jobs were net lost in industries producing goods and 119,000 were added in service providers.

Wage growth was little changed this month, but increased by 7.3% year-on-year.

Despite the low headline numbers, ADP chief economist Nella Richardson said weather factors were at play and job growth may not have been as weak as the numbers suggest.

“In January, weather-related turmoil affected employment in the reference week,” Richardson said. “Employment was strong in the other weeks of the month, in line with the strength seen late last year. .”

Like the Bureau of Labor Statistics, the ADP uses a 12-day week for salary sampling. The company said extreme weather events, including snowstorms in the Midwest and flooding in California, have impacted employment.

The ADP said 40,000 jobs were lost in the Midwest and 4,000 jobs were lost in the Pacific Rim.

Companies with fewer than 50 employees suffered the most during the period, losing 75,000 employees. In a large company employing more than 500 people he added 128,000 people.

The figure is aimed specifically at keeping inflation in check as the Federal Reserve seeks to slow the economy through a series of rate hikes.

The report also comes two days ahead of the more closely monitored BLS count of nonfarm payroll growth for the month. Economists surveyed by Dow Jones said in the report he expects to see growth of 187,000.

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