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Economy in Brief

U.S. ADP Nonfarm Private Payrolls Unexpectedly Decline in January
by Tom Moeller  February 2, 2022

• Omicron-related job loss is widespread.

• Leisure & hospitality sector is notably hard hit.

• Construction & factory sectors suffer significantly.

The ADP National Employment Report indicated that nonfarm private sector payrolls declined 301,000 during January (+4.7% y/y) following a 776,000 December increase, revised from 807,000. It was the first monthly decline since December 2020. A 210,000 January rise had been expected in the Action Economics Forecast Survey. The three-month average gain fell to 324,000. November payrolls increased 496,000, revised from 505,000.

ADP indicated "The labor market recovery took a step back at the start of 2022 due to the effect of the Omicron variant and its significant, though likely temporary, impact to job growth."

Small-sized payrolls were severely impacted last month, falling 144,000 (+4.5% y/y) after rising 192,000 in December. Large-sized payrolls declined 98,000 (+4.1% y/y) after increasing 378,000 in December. Medium-sized payrolls declined 59,000 last month (+6.3% y/y) following a 206,000 December gain.

Within industry sectors, private services employment led the decline last month with a 274,000 drop (+4.9% y/y) after rising 645,000 in December. Leisure & hospitality jobs weakened 154,000 in January (+16.7% y/y) which reversed most of the 239,000 December increase. The number of trade, transportation & utilities jobs fell 62,000 (+3.0% y/y) and reversed half of December's rise. The number of education & health services jobs fell 15,000 (+3.2% y/y) after rising 81,000 in December. Employment in financial services eased 9,000 (+1.5% y/y) after a 23,000 December increase. The number of information sector jobs fell in January by 8,000 (+1.7% y/y), the first decline in six months. Professional & business services jobs slipped 3,000 (+3.7% y/y) after triple-digit gains in both November and December.

Employment amongst goods-producing firms eased 27,000 (+3.8% y/y) last month following a 131,000 December rise. The number of factory sector jobs fell 21,000 last month (+2.9% y/y) after increasing 69,000 in December. Construction sector payrolls fell 10,000 in January (+4.8% y/y) after sharp increases in each of the prior four months. Employment in the natural resource & mining sector rose 4,000 last month (9.8% y/y) after rising 2,000 in December.

The Automatic Data Processing Research Institute survey covers 411,000 companies and includes about one-fifth of U.S. private payroll employment. The data are processed by Moody's Analytics Inc., then calibrated and aligned with the BLS establishment survey data. The ADP data cover private sector employment only.

The ADP National Employment Report data can be found in Haver's USECON database. Historical figures date back to 2001 for private employment and the industry breakdown, and 2005 for the business size breakout. The expectation figure is available in Haver's AS1REPNA database.

ADP/Moody's National Employment Report Jan Dec Nov Jan Y/Y 2021 2020 2019
Nonfarm Private Payroll Employment (m/m chg, 000s) -301 776 496 4.7% 2.1% -6.4% 1.4%
 Small Payroll (1-49) -144 192 107 4.5 3.3 -5.8 0.2
 Medium Payroll (50-499) -59 206 142 6.3 3.5 -7.2 1.9
 Large Payroll (>500) -98 378 247 4.1 0.8 -6.3 1.7
Goods-Producing -27 131 101 3.8 1.9 -4.1 1.5
  Construction -10 60 50 4.8 3.1 -2.5 2.5
  Manufacturing -21 69 45 2.9 1.2 -4.7 1.0
Service-Producing -274 645 396 4.9 2.1 -6.8 1.3
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