Private payrolls unexpectedly declined in January as the Omicron variant’s spread contributed to a marked weakening in the labor market at the beginning of the year.
U.S. private sector employment fell by 301,000 in January, ADP said in its closely watched monthly report on Wednesday. That represented the first drop in payrolls since December 2020 and came after 776,000 payrolls were added back in December, based on ADP’s revised monthly print. Consensus economists had anticipated that about 180,000 private payrolls would return in January, according to Bloomberg data.
Service areas of the economy saw some of the largest declines in payrolls, with industries most vulnerable to virus-related disruptions posting some of the biggest losses. Leisure and hospitality jobs fell by more than 150,000 in January, unwinding some recent gains during the recovery. This was followed by trade, transportation and utilities jobs, which together declined by 62,000 in January. Education and health services payrolls fell by 15,000.
Private employers in goods-producing industries also shed payrolls on net during the month. Both manufacturing and construction payrolls dropped in January, by 21,000 and 10,000, respectively.
The January payroll report marks the first to capture a comprehensive picture of the impact the Omicron variant has had on the U.S. economy and labor market. The highly contagious variant first discovered in the U.S. in late November had not yet spread widely enough by the survey period for the December monthly report to generate a meaningful impact on the results.
Click here to see the full report from Emily McCormick at Yahoo Finance.
