ADP Employment Growth Disappoints in January; Earnings Gain Slips
by:Tom Moeller
|in:Economy in Brief
Summary
- Employment gain is smallest in two years.
- Small-sized firm hiring declines; medium-sized growth slows.
- Pay gains continue to ease.
Nonfarm private sector payrolls increased 106,000 last month (2.8% y/y) after rising 253,000 in December, revised from 235,000, and a 212,000 November gain, revised from 182,000. A 160,000 January increase had been expected in the Action Economics Forecast Survey.
Growth in median annual pay for "job stayers" held m/m at 7.3% y/y, but was below a September high of 7.8% y/y. These compare to a low of 1.6% in March of 2021. The earnings increase was led by 10.1% growth in leisure & hospitality earnings, but that is down from 16.9% y/y growth in March 2022. Financial sector earnings rose a lessened 7.4% y/y. Factory sector pay rose a smaller 7.2% y/y while professional & business service sector earnings rose 6.7% y/y.
Small businesses hiring (1-49 employees) fell 75,000 (+0.2% y/y), down for the fifth month in the last six. Employment at firms with 50-499 employees rose 64,000 (5.3% y/y) after a 272,000 December gain. The three-month average increase was steady at 217,000. Employment at large-sized firms rose 128,000 (4.0% y/y) last month after rising 52,000 during December. Large-sized payrolls rose an average 55,000 during the last three months compared to a 171,000 average three-month gain as of last March.
By industry group, goods-producing employment fell 3,000 (+1.7% y/y) after a 32,000 December rise. Factory sector jobs rose 23,000 (2.7% y/y) after a 19,000 gain. Construction employment fell 24,000 (+0.7% y/y) after increasing 21,000 in December.
Service-producing jobs rose 109,000 last month (3.0% y/y) following a 221,000 December increase. Leisure & hospitality employment led the gain with a 95,000 increase (7.1% y/y) after rising 64,000 in December. Professional & business services employment improved 8,000 (3.7% y/y) after a 38,000 increase. Education & health care sector employment improved 12,000 (3.0% y/y) after strengthening 122,000 in December. Information sector jobs edged 5,000 higher (2.7% y/y) following a 3,000 increase. To the downside, trade, transportation & utilities payrolls fell 41,000 (+0.6% y/y) after a 6,000 November decline while financial activities employment rose 30,000 (0.9% y/y) after falling 5,000.
By Census region, employment in the South rose 55,000 (2.2% y/y) following a 63,000 gain. Employment in the Northeast improved 42,000 (4.3% y/y) following a 106,000 December increase. Jobs in the Midwest declined 40,000 (+1.6% y/y) as heavy snowfall reduced employment. In the West, payrolls rose 27,000 last month (3.6% y/y) after rising 69,000 in December.
The ADP National Employment Report and Pay Insights data can be found in Haver's USECON database. Historical figures date back to January 2010 for private employment. Pay data date back to October 2020. The expectation figure is available in Haver's AS1REPNA database.
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
More Economy in Brief
Global
