Additional Coverage:
January Sees Slower Job Growth Than Anticipated, ADP Report Reveals
February 4th – Private sector job growth in January significantly underperformed expectations, with companies adding a modest 22,000 positions. This figure represents only half of what forecasters had predicted, according to the ADP National Employment Report released on Wednesday.
The service industry was the primary driver of new employment, accounting for 21,000 of the added jobs. Education and health services led the way within this sector, creating a robust 74,000 new positions. However, these gains were partially offset by substantial losses in other areas, including a drop of 57,000 jobs in professional and business services, as well as declines in information and other service sectors.
Nela Richardson, chief economist for Always Designing for People, commented on the broader trend, stating, “Job creation took a step back in 2025, with private employers adding 398,000 jobs, down from 771,000 in 2024.” She further noted, “While we’ve seen a continuous and dramatic slowdown in job creation for the past three years, wage growth has remained stable.” This latest report aligns with a pattern of slower-than-expected job growth observed throughout 2025 and into the new year, with wage gains also showing minimal movement.
In the goods-producing sector, a slight increase of 1,000 jobs was recorded, though the manufacturing industry experienced a loss of 8,000 positions.
Geographically, the Midwest emerged as the leader in job growth, adding 25,000 jobs. In contrast, the West and South regions reported losses of 11,000 and 10,000 jobs, respectively.
Regarding wages, individuals who remained in their current roles saw a median salary increase of 4.5%. For those who changed jobs, the median salary change was higher at 6.4%. Breaking down salary changes by industry for those who stayed, financial activities recorded the highest median increase at 5.2%, closely followed by manufacturing at 5%.
The ADP report is an independent analysis of the labor market, drawing on anonymous payroll data from 26 million employees across the private sector.