Private Sector Hiring Slowed in January

ADP graphic Jan 2016

After an especially strong hiring surge in December, job growth cooled off a bit in January, as private employers added 205,000 jobs, according to HR services and payroll processor ADP.

ADP’s National Employment Report says the service sector accounted for 192,000 of those new jobs, with businesses of fewer than 500 workers accounting for 161,000 of the overall total. The report also adjusted upward to 267,000 the initial count of December’s new jobs.

Prior to the release of the report this morning, economists worried the global economic slowdown, which has roiled financial markets, might prompt employers to back off hiring. They forecast the report would show 190,000 new private sector jobs.

Instead, January’s job growth was higher than in all but two of the last 12 months. A year ago in January, employers added 220,000 jobs. That month, construction accounted for 31,000 new jobs while manufacturing added 8,000. Last month, construction added 10,000 fewer jobs and manufacturing added none.

Here are the numbers for hiring in other sectors:

  • Trade/transportation/utilities 35,000
  • Financial activities 19,000
  • Professional/business services 44,000

And by company size:

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  • Small businesses: 79,000
    • 1-19 employees 47,000
    • 20-49 employees 32,000
  • Medium businesses (50-499 employees): 82,000
  • Large businesses: 44,000
    • 500-999 employees 15,000
    • 1,000+ employees 30,000

“Job growth remains strong despite the turmoil in the global economy and financial markets,” said Mark Zandi, chief economist of Moody’s Analytics, which prepares the report for ADP. “Manufacturers and energy companies are reducing payrolls, but job gains across all other industries remain robust. The U.S. economy remains on track to return to full employment by mid-year.”

Now, economists are looking toward the U.S. Labor Department’s monthly employment report. To be released Friday, the prediction is that it will show a combined private and public sector job growth of about 190,000. That would be a sharp reduction from the government’s initial count of 292,000 new jobs in December.