Hiring by U.S. businesses slows in January, but job growth still solid despite market turmoil
A veteran speaks with an outreach representative at a jobs fair in Florida last year.
Hiring by U.S. businesses slowed in January, but private-sector job growth remained solid in a sign the labor market has been able to withstand the recent financial market turmoil, according to a report released Wednesday by payroll firm Automatic Data Processing.
Private employers added 205,000 net new jobs last month, down from an upwardly revised 267,000 in December, ADP said.
Economists had expected job gains to slow after an unusually strong finish last year and sharp downturns in major stock indexes that have been driven by concerns about slowing global growth.
But the ADP figure, which is watched as a signal of overall job growth, was better than the 190,000 that analysts had forecast.
“Job growth remains strong despite the turmoil in the global economy and financial markets,” said Mark Zandi, chief economist at Moody’s Analytics, which assists ADP in preparing the monthly report.
“Manufacturers and energy companies are reducing payrolls, but job gains across all other industries remain robust,” he said.
Falling oil prices have hurt the energy industry. At the same time, slowing economies in China and elsewhere around the world have caused the value of the dollar to increase, making U.S. manufactured goods more expensive abroad.
Manufacturing companies added no additional net jobs in January, down from a weak gain of 4,000 the previous month, ADP said.
But the construction industry posted another solid month, adding 21,000 net new jobs. That figure was down from 31,000 in December.
Economists are expecting the Labor Department to report Friday that overall job growth -- private and public sector -- slipped last month to 188,000. That would be down significantly from December’s robust 292,000 net new jobs.
Still, a figure close to 200,000 would indicate labor market growth continues to be solid in the wake of tumultuous financial markets and a slowdown in the U.S. economy at the end of last year.
The unemployment rate is expected to have held steady in January at 5%, the lowest level since 2008. And economists are forecasting a small rise in average hourly earnings after a slight drop in December.
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