Private sector job creation fell in January as weather-related issues put workers on the sidelines, payroll processing firm ADP reported Wednesday.
Companies added just 106,000 new workers for the month, down from an upwardly revised 253,000 the previous month. Economists surveyed by Dow Jones were looking for a gain of 190,000.
Most of the growth came in the hospitality industry, with bars, restaurants, hotels and the like adding 95,000 jobs. Other growth industries included financial activities (30,000), manufacturing (23,000), and education and health services (12,000).
However, the trade, transport and utilities sector lost 41,000, construction was down 24,000, and natural resources and mining were down 2,000.
Overall, goods-producing industries saw a net loss of 3,000 jobs, while service providers added 109,000.
Wage growth was little changed for the month, but up 7.3% from a year ago.
Despite the low headline number, ADP chief economist Nela Richardson said weather factors were at play and job growth may not have been as weak as the number suggests.
Heavy rains hit Edgewater New Jersey and caused flooding on Monday, in New Jersey, United States of America on January 23, 2023.
Diet | Anadolu Agency | Getty Images
“In January, we saw the impact of weather disturbances on employment during our reference week,” Richardson said. “Hiring was stronger during the remaining weeks of the month, consistent with the strength we saw late last year.”
Like the Bureau of Labor Statistics, ADP uses the week of the 12th for its payroll sampling. The company noted that extreme weather events, including blizzards in the Midwest and flooding in California, affected the job picture.
The Midwest region lost 40,000 jobs, while the Pacific Rim lost 4,000, according to ADP.
Companies with less than 50 employees struggled the most during the period, down 75,000 workers. Large firms employing 500 or more workers added 128,000.
The numbers come as the Federal Reserve tries to slow the economy through a series of interest rate hikes aimed specifically at reducing inflation.
The report also comes two days before the more closely watched BLS numbers on nonfarm payrolls growth for the month. Economists surveyed by Dow Jones are expecting growth of 187,000 in that report.
Correction: The Dow Jones estimate was for a gain of 190,000. An earlier version got the figure wrong. Natural resources and mining decreased by 2,000. An earlier version got the figure wrong. Service providers added 109,000. An earlier version got the figure wrong.