Private firms’ payroll unexpectedly decreased by 301,000 in January as the Omicron coronavirus variant slowed down the recovering labor market, according to the ADP National Employment Report.
The 301,000 jobs lost in January marks a significant decrease from the 776,000 jobs added in December 2021, according to the ADP report. January’s figure is also well below the Dow Jones estimate for growth of 200,000, and it is the first time ADP reported negative job growth since December 2020.
ADP Jobs Report Disaster
Makes Friday even more intriguing but don’t worry the unemployment rate won’t change. pic.twitter.com/FXwxMcOvKX
— Charles V Payne (@cvpayne) February 2, 2022
Leisure and hospitality, both industries hit hard by the COVID-19 pandemic restrictions, together accounted for over half of the jobs lost in January, according to ADP. Trade, transportation and utility jobs recorded a combined decrease of 62,000, while the other services category cut 23,000. (RELATED: Key Inflation Indicator Soars To Highest Level Since 1983)
“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,” Nela Richardson, chief economist at ADP, said in the report.
“The majority of industry sectors experienced job loss, marking the most recent decline since December 2020,” Richardson said. “Leisure and hospitality saw the largest setback after substantial gains in fourth quarter 2021, while small businesses were hit hardest by losses, erasing most of the job gains made in December 2021.”
The U.S. Bureau of Labor Statistics (BLS) is scheduled to release January’s jobs report on Feb. 4. Economists surveyed by CNBC projected that the U.S. economy added just 150,000 jobs in January compared to December 2021’s increase of 199,000.
Meanwhile, the number of job openings in December 2021 increased to 10.9 million from November’s 10.8 million figure, BLS announced Tuesday, The Wall Street Journal reported. However, the number of American’s who quit their jobs dipped to 4.3 million from November’s record 4.5 million.
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