U.S. ADP Payrolls Firm in January; Pay Increase
by:Tom Moeller
|in:Economy in Brief
Summary
- Employment increase is led by service sector hiring.
- Wage gains for “job changers” & “job stayers” are steady.
- Small, medium & large business hiring is firm.
The ADP National Employment Report indicated that nonfarm private sector payrolls rose 183,000 (1.3% y/y) during January after increasing 176,000 in December, revised from 122,000, and 204,000 in November, revised from 146,000. A 142,000 January rise in ADP employment had been expected in the Action Economics Forecast Survey.
Growth in median annual pay for "job stayers" of 4.7% y/y in January compared to 4.6% y/y in December, well below a September 2022 high of 7.8% y/y. Financial sector earnings rose 5.0% y/y.
In the education & health services sector, pay increased 5.0% y/y. Pay increases in the construction sector were 5.0% y/y. Manufacturing pay growth of 4.9% y/y has been steady for the last year. Leisure & hospitality pay rose an improved 4.8% y/y. Professional & business services pay grew a slower 4.6% y/y. In the trade, transportation & utilities sector, earnings rose 4.3% y/y. Information sector earnings increased 4.3% y/y while “other” services earnings increased 4.6% y/y. Pay increases for “job changers” averaged 6.8% y/y in January, down from 6.9% y/y in December and 7.7% one year earlier.
Small business hiring (less than 50 employees) rose 39,000 (0.7% y/y) in January, following a 31,000 December rise, revised from 5,000. Employment at medium-sized firms (50-499,000 employees) rose 92,000 (1.0% y/y) after increasing 82,000 in December, revised from 9,000. Large business hiring (500+ employees) rose 69,000 (3.6% y/y) last month, the same as during December, revised from 97,000. November’s gain was revised to 69,000 from 113,000.
Goods-producing employment fell 6,000 (+1.1% y/y) after rising 37,000 in December, revised from 10,000. The number of construction sector jobs rose 3,000 (3.7% y/y) following a 18,000 December increase, revised from 27,000. Jobs in the manufacturing sector fell 13,000 (-0.6% y/y) after 8,000 in December, revised from an 11,000 fall. Natural resource & mining hiring rose 4,000 (1.4% y/y) after an 11,000 rise, revised from 6,000.
The number of service-producing jobs rose 190,000 (1.4% y/y) following a 139,000 December gain, revised from 112,000. The number of jobs in trade, transportation & utilities increased 56,000 (0.7% y/y), after a 21,000 December gain. Leisure hospitality employment increased 54,000 (2.6% y/y) following a 40,000 December increase. Information sector hiring gained 18,000 (0.1% y/y) following an 8,000 improvement. The number of financial jobs rose 13,000 (1.1% y/y) after increasing 12,000. Employment in “other” services rose 15,000 (3.3% y/y), following a 10,000 gain in December. Professional & business services employment rose 14,000 (0.3% y/y) in January, after rising 19,000 the prior month. The number of education & health care jobs rose 20,000 (2.4% y/y) after 29,000 in December.
The ADP National Employment Report and Pay Insights data can be found in Haver's USECON database. Historical figures date back to January 2010 for private employment. Pay data date back to October 2020. The expectation figure is available in Haver's AS1REPNA database.
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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