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ADP Jobs Report: Economy Added 175,000 Jobs in January


The U.S. economy added 175,000 non-farm, private sector jobs between December and January, according to the ADP National Employment Report. This is about the same as the monthly average for 2013, but lower than economists’ predictions of 185,000 jobs.

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“Cold and stormy winter weather continued to weigh on the job numbers. Underlying job growth, abstracting from the weather, remains sturdy,” says Mark Zandi, chief economist of Moody’s Analytics, which produces the report with ADP. “Gains are broad based across industries and company sizes, the biggest exception being manufacturing, which shed jobs, but that is not expected to continue.”

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The Bureau of Labor Statistic’s report is expected to be mostly in line with ADP, a departure from last month, when ADP reported gains of 238,000 jobs and the Labor Department reported an increase of only 74,000 jobs. ADP revised its December numbers downward to 227,000 jobs.

Professional and business services was the sector with the most growth for January, at 49,000 jobs. Trade, transportation, and utilities gained added 30,000 jobs, while construction added 25,000. Financial activities was flat, while manufacturing lost 12,000 jobs.

Ian Shepherdson, chief economist at Pantheon Macroeconomics, tells Business Insider that he’s not concerned, despite the slowdown from December’s report.

“We reckon about half the downshift is real, captured in the drop in the ISM manufacturing jobs index, at least some of which is weather-related. The other half likely reflects technical factors. The headline ADP number is generated by a model, of which the key component is the actual survey of people employed by firms using ADP’s payroll services, but it also includes lagged official data. The December BLS number was very weak, and that has fed into the January ADP. We think it likely the BLS number for January will overshoot ADP, and we are still looking for private payrolls to rebound about 225,000, recovering some of the lost December ground.”

The PayScale Index forecasts a 0.7 percent growth in wages for the first quarter of 2014.

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Jen Hubley Luckwaldt
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