U.S. Private Sector Returns to Job Growth in January -- ADP

By Xavier Fontdegloria

The nonfarm private sector in the U.S. resumed its job-creation trend in January after companies shed workers in December amid a wave of business restrictions to contain Covid-19, data from ADP National Employment Report showed Wednesday.

Total U.S. nonfarm private employment increased by 174,000 in January. Economists polled by The Wall Street Journal were expecting it to show a lower gain of 50,000 jobs.

The reading suggests that overall hiring offset layoffs in January, resuming a job-creation trajectory that started in May, when the economy reopened after a lockdown imposed to control the coronavirus. In December, the U.S. private sector suffered a loss in payrolls of 78,000, down from an initial loss estimate of 123,000.

"The labor market continues its slow recovery amid Covid-19 headwinds," Ahu Yildirmaz, co-head of the ADP Research Institute, said.

Medium businesses, between 50 and 499 employees, are the ones which added the most jobs with an increase of 84,000. Small businesses, with a maximum of 49 employees, registered 51,000 payroll gains and large businesses, those of at least 500 workers, created 39,000 jobs.

"Although job losses were previously concentrated among small and midsized businesses, we are now seeing signs of the prolonged impact of the pandemic on large companies as well," Mr. Yildirmaz said.

By sector, the vast majority of jobs, or 156,000, were created in the service-providing sector, particularly in health care and social assistance and leisure and hospitality.

The goods-producing sector posted a gain of 19,000 jobs, data showed, almost all of them in the construction sector.

The report, carried out by the ADP Research Institute along with Moody's Analytics, is based on data through the 12th of the month.

The U.S. Department of Labor is expected to release its January employment report, which covers the same period as the ADP National Employment Report, on Friday. Economists are expecting it to show nonfarm payrolls up by 50,000 for the month and the unemployment rate stable at 6.7% compared with December.

Write to Xavier Fontdegloria at xavier.fontdegloria@wsj.com

(END) Dow Jones Newswires

February 03, 2021 08:51 ET (13:51 GMT)

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