ADP: Private Payrolls Added 213,000 Jobs in January

January 30, 2019

According to the ADP National Employment Report, employers added 213,000 private-sector jobs from December to January, beating expectations. Prior the release of the monthly report from payrolls processor ADP, economists forecast the addition of 174,000 jobs to private payrolls.

“The job market weathered the government shutdown well,” said Mark Zandi, chief economist of Moody’s Analytics, which produces the report with ADP. “Despite the severe disruptions, businesses continued to add aggressively to their payrolls. As long as businesses hire strongly the economic expansion will continue on.”

However, the full impact of the shutdown on the economy may take some time to quantify.

“Now that the monthlong shutdown is over, it will take government statisticians time to collect and analyze delayed figures for retail sales, manufacturing, housing and other parts of the economy,” writes Ben Casselman at The New York Times. “On Monday, the Commerce Department said it would not be able to release an estimate of gross domestic product for the fourth quarter that had been scheduled for Wednesday.”

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The CBO reported that there is “considerable uncertainty” about the impact of the shutdown.

“In particular, CBO is uncertain about how much discretionary spending was affected by the partial shutdown, how affected federal employees and contractors adjusted their spending in response to delayed compensation, and how agencies will adjust their spending on goods and services now that funding has resumed,” the agency said, per NPR.

Where Jobs Are Growing

“The labor market has continued its pattern of strong growth with little sign of a slowdown in sight,” said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute. “We saw significant growth in nearly all industries, with manufacturing adding the most jobs in more than four years. Midsized businesses continue to lead job creation, however the share of jobs was spread a bit more evenly across all company sizes this month.”

Medium-sized businesses (50 to 499 employees) added 84,000 jobs last month, while small businesses (fewer than 50 employees) added 63,000 jobs and large businesses (500 or more employees) added 66,000 jobs.

The goods-producing sector added 68,000 jobs total, with gains in manufacturing (33,000 jobs) and construction (35,000 jobs). Mining shed 1,000 jobs last month.

On the service-providing side, several industries added jobs in January, including:

Professional/business services: 46,000 jobs
Education/health services: 38,000 jobs
Leisure/hospitality: 31,000 jobs
Trade/transportation/utilities: 13,000 jobs

The Upcoming Employment Situation Summary

Friday’s report from the Labor Department will show jobs added to public and private non-farm payrolls, as well as the updated unemployment rate and information about wage growth. MarketWatch forecasts the addition of 174,000 jobs last month, and an unemployment rate holding steady at 3.9 percent.

The PayScale Index, which measures the change in wages for employed U.S. workers, showed 1 percent year-over-year wage growth for Q4 2018. Real wages, which reflect the buying power of workers’ pay after inflation, were 9 percent lower than in 2006.