US ‘jobless growth’ deepens…Private-sector employment rises by just 22,000 in January

ADP: Private-sector employment at companies up 22,000 in January

Far short of Dow Jones estimate of 45,000

US private-sector employment was effectively flat in January.

According to payroll processor ADP on the 4th (local time), private-company employment increased by just 22,000 in January. That was below even the downwardly revised gain in December last year (37,000) and also came in well under the market forecast compiled by Dow Jones (45,000). Had the education and health services sector not added 74,000 jobs, overall employment would likely have declined.

The report indicates that the 2026 labor market got off to a start not much different from the end of 2025. In other words, a “low-hiring, low-layoff” environment—where neither hiring nor layoffs are particularly active—has persisted, and it is seen as insufficient to ease US Federal Reserve (Fed) policymakers’ concerns about the need for further economic support.

ADP Chief Economist Nela Richardson told CNBC that “employment is clearly slowing,” adding that “the trend observed over the past three years is continuing.” She also said that “in the current economic environment, employers are extremely reluctant to hire.”

Richardson said ADP’s recalibration of its data benchmarks showed that 2025 job gains had been overstated versus prior releases by about 18,000 per month on average, or roughly 216,000 for the year.

Excluding the health and education sector, the drivers of last year’s job growth were sharply limited. Finance added 14,000 jobs and construction rose by 9,000. Wholesale and retail, transportation and utilities, and leisure and hospitality each added 4,000.

By contrast, several industries posted job declines. Professional and business services plunged by 57,000, other services fell by 13,000, and manufacturing also dropped by 8,000. Of the net increase, just 1,000 jobs came from sectors outside services.

By company size, midsize firms with 50 to 499 employees accounted for all net job creation. Small businesses were unchanged, while large companies recorded a reduction of 18,000 workers. However, the detailed figures do not match exactly due to rounding.

Wage growth was little changed from the prior month. Pay for workers who stayed in their existing jobs rose 4.5% year over year.

The ADP employment report is typically released ahead of the nonfarm payrolls report published by the Bureau of Labor Statistics (BLS) under the US Department of Labor. However, the release of this month’s BLS jobs report is expected to be delayed due to the fallout from the recently ended partial federal government shutdown. New York=Correspondent Park Shin-young nyusos@hankyung.com