U.S. private payroll growth falls well short of expectations – ADP

The ADP private payrolls report released on Wednesday showed that U.S. private-sector job growth came in well below expectations in January, largely due to employment declines in professional and business services as well as manufacturing.

Private employment rose by just 22,000 jobs last month, compared with a downwardly revised increase of 37,000 in December (previously reported at 41,000), and far short of the 46,000 consensus forecast.

The strongest job gains were recorded in education, health services, and construction, while employment also increased in trade, transportation, leisure, and hospitality.

The ADP data comes ahead of the more comprehensive and closely watched U.S. nonfarm payrolls report for January, which was scheduled for release on Friday but has been delayed due to the partial federal government shutdown.

Based on available indicators, economists expect the U.S. labor market to remain in a “low-hire, low-fire” environment, driven mainly by the impact of import tariffs and the growing adoption of artificial intelligence.

In contrast, Federal Reserve Chair Jerome Powell struck a more optimistic tone, suggesting that labor market conditions may be stabilizing after a period of gradual softening.