US private-sector employment grew more than expected in January, ADP says

US private-sector employment grew more than expected in January, ADP says
Marco Bello/Reuters
  • The US gained 174,000 private payrolls in January, according to ADP's monthly employment report.
  • The data follows a revised 78,000-payroll contraction in January and lands above the 70,000 estimate.
  • ADP's report comes two days before the Bureau of Labor Statistics publishes nonfarm payrolls data.

Employment at US businesses expanded last month as COVID-19 cases began to fall and the US remained mired in a strict economic lockdown.

The country's private sector added 174,000 payrolls in January, according to the ADP monthly employment report published Wednesday morning. Economists surveyed by Bloomberg expected payrolls to climb by 70,000.

The addition follows a revised 78,000-payroll plunge in December that marked the first month of contraction since the pandemic first froze hiring in the spring of 2020. The previous ADP report preceded a surprise decline in the government's count of nonfarm payrolls. While cases have trended lower and vaccine distribution has accelerated, the US labor market remains far from a full recovery.

"The labor market continues its slow recovery amid COVID-19 headwinds," Ahu Yildirmaz, vice president and co-head of the ADP Research Institute, said in a statement. "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."

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The US saw strong gains across the trade and transportation and hospitality sectors, according to the report. The information and mining sectors underperformed through the month.

Small businesses added 51,000 payrolls, while medium and large businesses gained 84,000 and 39,000 payrolls, respectively.

To be sure, the country continues to endure a dire stage of the pandemic. The US reported 115,619 new cases on Tuesday, according to The COVID Tracking Project. Hospitalizations fell to 92,880 and total deaths hit 437,237.

The pace of recovery could receive a hefty boost in a matter of weeks. Congressional Democrats took the first steps toward passing stimulus through budget reconciliation on Tuesday. The process would allow them to move President Joe Biden's $1.9 trillion stimulus proposal forward without support from Senate Republicans. The package is set to include $1,400 direct payments, expanded unemployment insurance, and aid for state and local governments.

ADP's monthly report precedes the Bureau of Labor Statistics' Friday release. The government data will update the country's unemployment rate and give a more holistic view of the labor market fared in January. Economists forecast the US added 70,000 payrolls during the month.


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