US Private Employment Contracts for the First Time Since December 2020

Source: ADP Research Institute

The US private employment declined for the first time in 13 months in January, dragged by ongoing concerns regarding the Omicron variant of COVID-19.

• Private sector employment fell by 301,000 jobs in January, a reversal of the 776,000 growth in December 2021 and a 196,000 increase the previous year.
• The latest reading is the first contraction recorded in 13 months after private-sector employment slipped by 75,000 in December 2020.
• The decline was driven mainly by the services sector, which declined by 274,000. Leisure and hospitality posted the most significant drop at 154,000.
• Goods-producing firms reported a 27,000 decline during the month, as manufacturing fell by 21,000 and construction by 10,000.
• Small businesses recorded the biggest decline, down 144,000. Large businesses fell by 98,000, while medium businesses fell by 59,000.
• Franchise employment stood at 1,600.
• Chief Economist Nela Richardson attributed the drop to the impact of the omicron variant on job growth, although this is likely temporary.