As the Omicron variant slams the labor market, private payrolls fell by 301,000 for the month on January, well below the Dow Jones' estimate for growth in the neighborhood of 200,000. The pandemic-sensitive leisure and hospitality industry represented more than half of the decline as companies reported cutting 154,000 jobs. Other industries, such as trade, transportation and utilities, along with other service-providing industries make up the rest of the losses.
The report is the first time payroll processing firm ADP reported negative job growth since December 2020.
As CNBC explains:
The labor market recovery took a step back at the start of 2022 due to the effect of the omicron variant and its significant, though likely temporary, impact to job growth,” ADP's chief economist, Nela Richardson, said.”
From a business-size standpoint, the job losses were concentrated at small firms, with companies employing fewer than 50 people seeing a drop of 144,000. Businesses with more than 500 employees lost 98,000, while medium-sized firms declined by 59,000.
Federal Reserve officials are watching the jobs numbers closely. Policymakers have said they think the U.S. economy is around full employment, and they have teed up a series of interest rate increases this year.
