ADP’s January National Employment Report showed private employers added just 22,000 jobs, significantly underperforming consensus forecasts of roughly 100,000. This marks the lowest monthly gain since December 2020 and caps a full year in which private‐sector job creation totaled 398,000, down sharply from the 771,000 positions added in 2024. Dr. Nela Richardson, ADP’s chief economist, noted that this slowdown represents the third consecutive year of decelerating hiring activity despite historically robust corporate balance sheets.

Among service‐providing sectors, education and health services led gains with 74,000 new positions in January, offsetting declines elsewhere. Financial activities contributed 14,000 jobs, while trade, transportation and utilities added 4,000. In contrast, professional and business services shed 57,000 positions—the steepest drop among all categories—and manufacturing lost 8,000 jobs, extending its uninterrupted monthly contraction since March 2024. Goods‐producing industries were essentially flat, with construction up 9,000 and natural resources and mining unchanged.

Geographically, the Midwest saw the strongest momentum with 25,000 new jobs, led by a 17,000 gain in the West North Central states. The Northeast added 17,000 positions, while the South contracted by 10,000, driven by a 76,000 loss in the South Atlantic region that overshadowed a 47,000 gain in the West South Central states. By employer size, medium establishments (50–499 employees) contributed 41,000 jobs, whereas large firms (500+ employees) cut 18,000 roles and small businesses (1–19 and 20–49 employees) saw a net zero gain after offsetting effects within those subgroups.

ADP’s Pay Insights report shows that annual pay for job‐stayers increased 4.5 percent year-over-year in January, virtually unchanged from December’s figure. Job-changers saw their pay growth ease slightly to 6.4 percent. Among industries, manufacturing leads with 5.0 percent wage growth for incumbents, followed by financial activities at 5.2 percent. Small firms with 1–19 employees recorded the slowest wage rise at 2.5 percent, while large firms (500+ employees) offered 5.0 percent increases. This stability in wage trends contrasts sharply with the pronounced hiring deceleration, suggesting employers are prioritizing compensation over headcount expansion.