ADP Says Private Sector Jobs Fell By 301,000 in January

Omicron has taken a much bigger bite 0ut of the labor market than expected, data from payroll processing firm ADP indicated Wednesday.

The number of workers on private payrolls fell by 301,000  in January, falling far short of expectations for growth of 225,000 jobs.

This was the first decline in payrolls reported by ADP since 2020.

The leisure and hospitality sector shed 154,000 jobs. Trade, transportation, and utilities dropped 62,000 workers. Other services saw payrolls decline by 23,000. Health and education jobs fell by 15,000. Information technology jobs fell by 8,000 and financial services sank by 9,000.

Manufacturers cut 21,000 positions. Construction declined by 10,000. Mining and natural resources added 4,000.

All told, the services sector’s payrolls fell by 274,000 and the goods-producing sector’s payrolls dropped by 27,000.

The Department of Labor will report the official count for January jobs on Friday. It is expected to show that jobs grew by around 170,000 but that may be an underestimate of the impact of omicron.

The ADP jobs report traditionally was seen as a preview of the government employment statistics typically released two days later. Through much of the pandemic, however, the ADP report was a highly unreliable predictor of the official employment figures, although its defenders say it was not bad compared with other forecasts. In December, for example, the ADP report showed private employers adding 800,000 jobs and the official statistics showed 211,000 private-sector jobs and 199,000 total jobs added. On Wednesday, ADP revised down its estimate for December to 776,000.