Amid layoffs, private sector still added 106K jobs in January

Private sector payrolls grew by 106,000 jobs in January, even though many companies laid off workers, while annual pay increased 7.3% year-over-year, according to the payroll giant ADP.

The company's national employment report, released Wednesday, found that small businesses subtracted 75,000 jobs last month, including 70,000 from businesses with between one and 19 employees, and 5,000 at companies with between 20 and 49 employees.

Midsize businesses with between 50 and 249 employees added 99,000 jobs, but companies with between 250 and 499 employees subtracted 35,000 jobs. In contrast, large companies with 500 employees or more added 128,000 jobs.

The service-providing sector added 109,000 jobs in January, including 8,000 in professional and business services such as accounting and tax preparation, 30,000 in financial activities like banking, and 95,000 in leisure and hospitality. However, the trade, transportation and utilities sector lost 41,000 jobs.

ADP
An ADP sign at the TechFair LA job fair in Los Angeles.

The goods-producing sector lost a total of 3,000 jobs, including 24,000 in construction and 2,000 in natural resources and mining, offset by the manufacturing industry, which gained 23,000 jobs.

The data for the report was affected by severe weather in parts of the country. "This number of 106,000 in job gains that we saw was for the January 12 reference week," said Nela Richardson, chief economist at ADP, in a conference call Wednesday with reporters. "It was a week loaded with weather events. We had flooding in California. We had ice storms and snowstorms in the Midwest. We had weather in the South. What that all showed us in that week was that we saw softness in those places where the weather was more extreme than usual. Also we saw softness in professions that you do outside, like construction and natural resources. On the flip side, manufacturing was actually solid."

She noted that hiring was stronger during other weeks in January, in line with the strength seen late last year.

Pay growth for people who stayed at their jobs for 12 months or more held at 7.3% for the second month in a row, with most industries showing little change. One outlier was the information sector, where pay growth fell from 7% to 6.6%. In the professional and business services sector, the pay growth rate was 6.7%. For job changers overall, pay growth accelerated to 15.4%.

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