A person walks into a new cookie shop next to a “Help Wanted” sign on January 12, 2022 in New York City.
Alexi Rosenfeld/Getty Images
- The US private sector lost 301,000 jobs in January, according to ADP’s monthly hiring report.
- That badly missed the median forecast of 207,000 new jobs and marked the first contraction since December 2020.
- The report covers the period when the Omicron wave peaked in the US and jobless claims swung higher.
The US labor market’s recovery slid backward in January as the Omicron variant powered record-high infections and a new wave of economic turmoil.
Private payrolls fell by 301,000 in the first month of 2022, ADP said in its monthly hiring report on Wednesday. That badly missed the median forecast of 207,000 added payrolls from economists surveyed by Bloomberg. It also shows private-sector hiring reversing course from December’s increase of 807,000 jobs.
The report shows the hiring recovery taking a huge step back in the first weeks of the new year. Several factors likely hit the brakes on job growth. Daily COVID infections hit a peak of more than 1.4 million on January 10, and while counts have since fallen, they remain elevated compared to prior waves. The highest inflation in 40 years has also weighed on business sentiments as they struggle to navigate supply-chain troubles and waning consumer demand.
Weekly filings for unemployment benefits offered an early sign that the rebound was losing steam. Jobless claims began to swing higher in the last week of December and briefly hit the highest count since mid-October. Though claims data is somewhat volatile, the uptick signaled the jobs recovery is still on choppy waters.
The ADP print could also hint at a disappointing jobs report to come. Economists see the country adding 150,000 payrolls in January, reflecting yet another slowdown and the weakest growth since December 2020. Some, like economists at Bank of America, even see the US shedding jobs through January as the Omicron wave slammed businesses. With December’s jobs report already disappointing on most fronts, another bleak report would dramatically sour hopes for the US recovery.
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