United States employers showed a poor job growth during the first month of the year. Private payrolls fell by 301,000 during January 2022. ADP published this in their report.
This is the worst month in terms of job growth for more than a year. This is also the biggest drop-off in a single month since the onset of the pandemic. The Covid Omicron variant has badly affected the employment growth. It is for the first time since December 2020 that the payroll processing firm has reported negative employment growth. Earlier, APD forecasted an addition of 200,000 jobs in January 2022. However, the data is depicting otherwise. The federal government will publish its own outlook of the labor market on Friday in their release of January 2022 data. “The surge in Omicron is clearly slowing the job market”. Glassdoor senior economist Daniel Zhao tweeted this. He also called the ADP report a “negative indicator” for Friday’s jobs report.
Negative Employment Growth Across all Sectors
All the sector showed negative employment growth and this happened for the first time since April 2020. There are multiple indications of slow hiring leading into the new year. More than 4 million people quit jobs in December, according to federal data released Tuesday. Moreover, more than 8 million missed work because they were sick or caring for someone who was sick. Roughly 247,000 Americans applied for unemployment insurance each week, according to the Labor Department. This is a significant increase from November when this number dropped below 200,000.
Leisure and Hospitality Sector is Affected the Most
Leisure and hospitality led the jobs drop and lost 154,000 jobs. Trade, transportation and utilities cut 62,000 while the other services sector lost 23,000 jobs. Manufacturing also lost 21,000 positions. Whereas education and health services reported a drawdown of 15,000. Construction sector fell by 10,000 jobs. “The labor market recovery took a step back at the start of 2022 due to the effect of the omicron variant and it is significant. ADP’s chief economist, Nela Richardson said in his statement.
The ADP numbers come two days before the more closely watched nonfarm payrolls count from the Labor Department. Federal Reserve officials are watching the jobs numbers closely.
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