Private sector added 107K jobs in January

Private sector employers added 107,000 jobs in January as annual pay grew 5.2% on a year-over-year basis, payroll giant ADP reported Wednesday.

The ADP National Employment Report found small businesses added 25,000 jobs in January, including 19,000 in businesses with between one and 19 employees, and 6,000 in businesses with between 20 and 49 employees. Midsized businesses added 61,000 jobs, including 53,000 in companies with between 50 and 249 employees, and 8,000 in organizations with between 250 and 499 employees. Large companies with 500 employees or more gained 31,000 jobs.

The service-providing sector added 77,000 jobs, including 2,000 in professional and business services like accounting and tax preparation, and 7,000 in financial activities like banking. The goods-producing sector added 30,000 jobs, including 22,000 in construction and 2,000 in manufacturing. 

Patrick T. Fallon/Bloomberg

Year-over-year pay gains for those who stayed in their jobs reached 5.2% in January, a 5.4% decline from December. For those who changed jobs, pay rose 7.2%, but that was the smallest annual gain since May 2021. In the professional and business services sector, the median change in pay for job stayers was 5.1%.

"What we're seeing is a more stable labor market at the top of the year overall," said ADP chief economist Nela Richardson during a conference call Wednesday with reporters, pointing to a recent Job Openings and Turnover Survey report from the U.S. Bureau of Labor Statistics. "With wage pressures easing and the returns from job switching, as amplified by the JOLTS data from BLS earlier this week, people are not quitting as quickly as they did in 2022, so you see a bit more stability, and I think that's a tribute to the higher productivity numbers that we've seen with the economy."