ADP Jobs Report Misses Expectations
Payroll firm ADP reported that the economy added 175,000 jobs in January, a sharp decrease from its reported gain of 228,000 jobs in December. The estimate was lower than economists' expectations, which had predicted a gain of 185,000 jobs in the first month of the year. The report suggests a weakening jobs picture.
ADP also revised its December estimate of job growth downward from an initial gain of 238,000 jobs. Service industries led the job growth in January, adding 160,000 jobs. Manufacturing, meanwhile, shed 12,000 jobs. It was the first decline in manufacturing jobs since July 2013.
As has been the case recently with other bad economic data, some observers attributed the disappointing results to weather-related factors in the month. In many parts of the country is was colder than usual for a winter month. However, the construction industry reported, after services, the second highest number of jobs gained in the month with 25,000 jobs added. It is unlikely, then, that weather was a significant factor in the jobs miss.
On Friday, the Labor Department releases its official estimate of January job growth. The December report was a big disappointment, with just over 70,000 jobs added. ADP and Labor measure the employment market differently, so their numbers are rarely in-line with each other. Over time, however, they usually signal the same trends in the labor market.
Economists are expecting Friday's report from the Labor Department to show the economy gaining 225,000 jobs. The ADP report suggests that the jobs report will miss those expectations.