U.S. ADP Private Employment Edged Up in January
by:Sandy Batten
|in:Economy in Brief
Summary
- Total private employment rose a less-than-expected 22,000 in January.
- Goods-producing industries added only 1,000 jobs while service-producing industries produced 21,000 jobs.
- A 74,000 surge in education and health services jobs more than accounted for the overall January gain.
- Manufacturing lost 8,000 jobs. Manufacturing has lost jobs in every month since March 2024.
U.S. nonfarm private sector payrolls rose 22,000 (0.2% y/y) in January following a downwardly revised 37,000 increase in December (previously 41,000) and a 74,000 gain in November, according to the ADP National Employment Report. The three-month average change was +44,000 in January, the same as in December. For all of 2025, the average monthly gain was 33,000. The Action Economics Forecast Survey expected a 45,000 increase in January.
The overall monthly gain continued to be driven by service-producing industries. Goods-producing firms added only 1,000 jobs in January. However, this was the first monthly increase since last April. Manufacturing employment fell 8,000 while construction employment rose 9,000, its first monthly gain in six months. It does not appear that the Trump Administration tariff increases have yet generated a rebound in the manufacturing sector. Service-producing employment increased 21,000 in January, the smallest monthly gain in seven months. Gains were concentrated in health and education services with a 74,000 increase in jobs, the largest monthly gain since last May. By contrast, professional and business services lost 57,000 jobs in January.
Employment in very small firms (1-19 employees) continued to support overall job growth with a 30,000 rise in January, the seventh consecutive monthly gain. By contrast, employment in firms with 20-49 employees fell 30,000 in January, the fifth consecutive monthly decline. Employment at medium sized firms (50-499 employees) gained 41,000 in January, its largest monthly gain since December 2024. Employment at firms with 500 or more employees fell 18,000 in January, the first monthly decline since May 2025.
Wage growth for job changers slowed to 6.4% y/y in January from 6.6% in December. The pace of job-changer wage growth has generally been relatively steady over the past year or so but has slowed slightly over the past five months. Wage growth for job stayers edged up to 4.5% y/y in January from 4.4% in December. This growth has fluctuated between 4.4% and 4.5% for the past 10 months.
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.
Sandy Batten
AuthorMore in Author Profile »Sandy Batten has more than 30 years of experience analyzing industrial economies and financial markets and a wide range of experience across the financial services sector, government, and academia. Before joining Haver Analytics, Sandy was a Vice President and Senior Economist at Citibank; Senior Credit Market Analyst at CDC Investment Management, Managing Director at Bear Stearns, and Executive Director at JPMorgan. In 2008, Sandy was named the most accurate US forecaster by the National Association for Business Economics. He is a member of the New York Forecasters Club, NABE, and the American Economic Association. Prior to his time in the financial services sector, Sandy was a Research Officer at the Federal Reserve Bank of St. Louis, Senior Staff Economist on the President’s Council of Economic Advisors, Deputy Assistant Secretary for Economic Policy at the US Treasury, and Economist at the International Monetary Fund. Sandy has taught economics at St. Louis University, Denison University, and Muskingun College. He has published numerous peer-reviewed articles in a wide range of academic publications. He has a B.A. in economics from the University of Richmond and a M.A. and Ph.D. in economics from The Ohio State University.
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