U.S. private sector hiring rose less than analysts expected in January, payrolls agency ADP said on Wednesday, led by a manufacturing industry slowdown.
US private sector job growth missed January expectationsPrivate employers added 22,000 jobs last month, significantly below analysts’ forecast of 45,000.
Wednesday’s number was also below December’s revised 37,000.
ADP released figures on labor market concerns in the world’s largest economy as the overall unemployment rate rose 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 the partial federal shutdown has delayed the US government’s jobs release originally scheduled for Friday.
The Labor Department has rescheduled the release of this employment report for February 11, now that the stoppage has ended.
The ADP said January was “a poor month for recruitment.”
Education and health services added significant numbers of jobs, but manufacturing lost 8,000 positions.
The report states that the manufacturing sector has “lost jobs every month through March 2024.”
Among employers, January saw job losses at both small and large firms.
“Employment is concentrated in the service sector, with manufacturing industries lagging behind,” said Matthew Martin, an economist at Oxford Economics.
He added that signs of stability for now could allow the Federal Reserve to keep interest rates unchanged through midyear, rather than cut rates further to support markets.
“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 Nella Richardson.
He said while wage growth was steady, there had been a “persistent and dramatic slowdown in job creation over the past three years.”
The rate of wage growth for those remaining in their roles was little changed in January, at 4.5 percent year-on-year.
For those who moved jobs, annual salary growth fell from 6.6 percent to 6.4 percent, ADP said.
The health of the labor market is one of the key factors the Fed considers as it adjusts interest rates.
The US central bank cut rates three times last year in a bid to weaken employment, but has put further cuts on hold for now.
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