ADP: Private-Sector Employment Takes January Tumble

ADP, Roseland, N.J., said private-sector employment fell in January for the first time since December 2020, delivering a jolt to the post-pandemic economic recovery.

The ADP National Employment Report said private-sector employment fell by 301,000 jobs from December to January; analysts had expected an increase of 200,000.

Courtesy ADP, Roseland, N.J.

By size, small businesses (1-49 employees) lost 144,000 jobs; medium businesses (50-499 employees) lost 59,000 jobs; and large businesses lost 98,000 jobs. By sector, goods-producing employers lost 27,000 jobs and service-providing employers lost 274,000 jobs.

“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 with ADP. “The majority of industry sectors experienced job loss, marking the most recent decline since December 2020. Leisure and hospitality saw the largest setback after substantial gains in fourth quarter 2021, while small businesses were hit hardest by losses, erasing most of the job gains made in December 2021.”

The ADP report is the second major employment report this week; on Tuesday, the Bureau of Labor Statistics reported nearly 11 million job openings in December, while nearly 5 million Americans left employment that month.

This morning, the Labor Department issues its weekly Initial Claims for unemployment insurance report; past recent reports have shown volatility, with claims averaging 247,000. On Friday, BLS releases its January Employment report, which has shown disappointing numbers over the past several months, in part not because of available jobs but the inability to fill those jobs.

MBA NewsLink will provide coverage of both reports; MBA Chief Economist Mike Fratantoni will provide commentary and analysis of the Friday Employment report in the Monday, Feb. 7 edition.