ADP Employment Change (Jan) 22K vs 45K Expected

• ADP Employment Change (Jan) 22K vs 45K Expected

Private sector employment increased by 22,000 jobs in January while annual pay rose 4.5% year-over-year, according to ADP's National Employment Report released February 4. The report is based on payroll data from more than 26 million private-sector employees.

Education and health services led job growth with 74,000 positions added. Manufacturing continued its decline, losing 8,000 jobs and marking consecutive monthly losses since March 2024. Professional and business services shed 57,000 jobs.

By region, the Midwest added 25,000 jobs and the Northeast gained 17,000 positions. The South and West regions each lost jobs, declining by 10,000 and 11,000 respectively.

"Job creation took a step back in 2025, with private employers adding 398,000 jobs, down from 771,000 in 2024," said Dr. Nela Richardson, chief economist at ADP (NASDAQ: ADP). "While we've seen a continuous and dramatic slowdown in job creation for the past three years, wage growth has remained stable."

Medium-sized establishments with 50-499 employees added 41,000 jobs, while large establishments with 500 or more employees cut 18,000 positions. Small establishments showed no net change.

Pay growth for job-changers slowed to 6.4% from 6.6% in the previous month. Manufacturing workers saw the highest pay increases among job-stayers at 5.0%, while information sector workers experienced the lowest at 4.1%.

ADP revised December's job creation figure down from 41,000 to 37,000. The report reflects annual benchmark revisions aligned with Quarterly Census of Employment and Wages data through March 2025.

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