A 7-Eleven convenience store has a sign in the window reading “Now Hiring” in Cambridge, Massachusetts, U.S., July 8, 2022.
Brian Snyder | Reuters
Private payroll growth declined sharply in January, a possible sign that the U.S. labor market is heading for a slowdown this year, ADP reported Wednesday.
Companies added 107,000 workers in the first month of 2024, off from the downwardly revised 158,000 in December and below the Dow Jones estimate for 150,000, according to the payrolls processing firm.
Only one sector — information services (-9,000) — reported a decline, but hiring was slow across virtually all sectors.
Leisure and hospitality posted the biggest increase, with an addition of 28,000 workers, while trade, transportation and utilities added 23,000, and construction rose by 22,000. Services-providing companies were responsible for 77,000 jobs, with goods producers adding the rest.
The release comes two days ahead of the Labor Department’s nonfarm payrolls report, which is expected to show growth of 185,000, against the 216,000 increase in December. While the ADP data can provide a barometer for private sector hiring, the two reports often differ, with ADP often undershooting the Labor Department’s numbers.
On wage gains, ADP reported a 5.2% annual rise, a number that has run above the government’s measure of average hourly earnings.
“Wages adjusted for inflation have improved over the past six months, and the economy looks like it’s headed toward a soft landing in the U.S. and globally,” said ADP’s chief economist, Nela Richardson.
Midsize establishments, with between 50 and 499 employees, led job creation, adding 61,000. Small business added just 25,000.
Don’t miss these stories from CNBC PRO: