Job creation in the private sector fell in January as weather-related problems have marginalized workers, payroll company ADP reported on Wednesday.
Companies hired just 106,000 new employees this month, compared to an upwardly revised 253,000 the previous month. Economists polled by Dow Jones had expected a gain of 190,000.
Most of the growth came from hospitality, where bars, restaurants, hotels and the like added 95,000 jobs. Other growth industries included financial activities (30,000), manufacturing (23,000), and education and healthcare services (12,000).
However, trade, transportation and utilities lost 41,000, construction fell 24,000, and natural resources and mining fell 2,000.
Overall, manufacturing industries saw a net loss of 3,000 jobs, while service industries added 109,000.
Wage growth was little changed for the month but is up 7.3% year-on-year.
Despite the low headline count, ADP chief economist Nela Richardson said weather factors were at play and job growth may not have been as weak as the figure suggests.
Heavy rains hit the Edgewater in New Jersey causing flooding on Monday January 23, 2023 in New Jersey, United States.
Fatih trades | Anadolu Agency | Getty Images
“In January, during our reference week, we saw the impact of weather-related disruptions on employment,” Richardson said. “The other weeks of the month, attitudes were stronger, similar to the strength we saw late last year.”
Like the Bureau of Labor Statistics, ADP uses the week of the 12th for its payroll. The company found that extreme weather events, including snowstorms in the Midwest and flooding in California, were impacting employment.
The Midwest region saw a 40,000 job drop, according to the ADP, while the Pacific Rim lost 4,000.
Companies with fewer than 50 employees struggled the most during the reporting period, employing 75,000 people. Large companies with 500 or more employees added 128,000.
The numbers come from the Federal Reserve, which is trying to slow the economy through a series of rate hikes specifically aimed at bringing down inflation.
The report also comes two days ahead of the more closely watched BLS figure of nonfarm wage growth for the month. Economists polled by Dow Jones expect growth of 187k in this report.
Correction: The Dow Jones estimate was for a profit of 190,000. A previous version incorrectly stated the figure. Natural resources and mining decreased by 2,000. A previous version incorrectly stated the figure. Service providers added 109,000. A previous version incorrectly stated the figure.