Private Employment Rises By 183,000, Beats Estimates In January: 'Consumer-Facing Industries Drove Hiring'

Private employers created 183,000 new jobs in January 2025, marking a slight acceleration from December’s upwardly revised 176,000 and beating market expectations of 150,000.

The ADP National Employment Report, released Wednesday by Automatic Data Processing Inc., highlighted continued resilience in the private labor market ahead of Friday's highly anticipated non-farm payrolls report from the Bureau of Labor Statistics. Economists expect the government report to show a slowdown in hiring, with forecasts predicting a decline from December's 256,000 to 170,000 new jobs.

Nela Richardson, ADP’s chief economist, said: “We had a strong start to 2025 but it masked a dichotomy in the labor market. Consumer-facing industries drove hiring, while job growth was weaker in business services and production.”

Where Did Jobs Grow in January?

The latest data revealed a divergence in job creation, with gains concentrated in service-providing industries, while goods-producing sectors continued to lag.

Goods-producing industries shed 6,000 jobs in January, driven by a 13,000 payroll reduction in manufacturing. This marked the fourth consecutive month of job losses in the sector.

Service-providing industries, on the other hand, added 190,000 positions. Trade, transportation, and utilities led the way with 56,000 new jobs, while leisure and hospitality followed closely, adding 54,000 positions.

December’s private employment growth was also revised upward to 184,000, exceeding the consensus estimate of 150,000 tracked by TradingEconomics.

The ADP report signaled ongoing moderation in wage growth. Pay increases for job stayers in January edged up 4.7% year-over-year, while job changers saw salary gains of 6.8%, down from 7.1% in December.

These figures suggest that while the labor market remains strong, wage pressures are easing—a key factor for the Federal Reserve as it assesses the timing of potential interest rate cuts in 2025.

Market Reactions

The U.S. Dollar Index (DXY) – as tracked by the Invesco DB USD Index Bullish Fund ETF UUP – inched slightly higher minutes after the release, trimming losses for the day.

Futures on major U.S. indices edged lower during premarket trading in New York. The SPDR S&P 500 ETF Trust SPY was 0.4% lower by 8:25 a.m. ET.

Shares of Apple Inc. AAPL and Alphabet Inc. GOOGL were 2.4% and 7.2% lower, respectively, weighing on tech-heavy indices.

Gold – tracked by SPDR Gold Trust GLD – continued to extend record highs, with the bullion rising to $2,870 per ounce, approaching double-digit gains year-to-date.

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