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Private-sector employment fell sharply in January, as U.S. companies cut more than 300,000 jobs, according to data from payroll provider ADP.
The January employment report, which measures the change in employees on private companies’ payrolls, found that private-sector employment decreased by 301,000 jobs, significantly below the 200,000 addition expected by economists surveyed by FactSet. In December, the private sector added 776,000 jobs, revised down from 807,000, according to the survey.
“The labor market recovery took a step back at the start of 2022 due to the effect of the Omicron variant and its significant, though likely temporary, impact to job growth,” said Nela Richardson, chief economist at ADP.
Most industries saw a setback, especially leisure and hospitality.
Large businesses cut 98,000 jobs, while medium businesses slashed 59,000 and small businesses lost 144,000, erasing most job gains made in December, Richardson said. The service-providing sector lost a whopping 274,000 jobs, 154,000 of which were in the leisure and hospitality sector.
The ADP National Employment report, which surveys a sizable sample of the U.S. labor market, is seen as a rough preview of the government’s jobs data for January. The data tends to track the official numbers over time, but in recent months have lagged.
The Labor Department releases its monthly jobs report on Friday. Economists are expecting nonfarm payrolls to come in at 175,000, with the unemployment rate staying at 3.9%.
Job openings increased in December to 10.9 million, up from 10.6 million in November, according to data released by the Labor Department on Tuesday. Economic indicators point to a strong labor market.
Write to Sabrina Escobar at [email protected]
