Private payrolls rose by just 22,000 in January, far short of expectations, ADP says

• Excluding a 74,000 surge in education and health services, overall job growth would have been negative, with professional and business services losing 57,000 positions and manufacturing down 8,000
• Mid-sized companies (50-499 workers) drove all employment gains, while small firms remained flat and large employers cut 18,000 positions
• Wage growth held steady at 4.5% for workers staying in their jobs, unchanged from December despite the weak hiring environment

Summary: U.S. Private Sector Hiring Stalls in January

Key Figures:

Private sector employers added only 22,000 jobs in January 2026, significantly missing the consensus forecast of 45,000, according to ADP's monthly report. This represents a decline from December's downwardly revised 37,000 jobs.

Sector Performance:

The labor market showed stark sectoral divergence. Education and health services surged with 74,000 new positions—without this sector, overall job growth would have been negative. Other modest gains included financial activities (+14,000), construction (+9,000), and trade, transportation, and utilities (+4,000).

Major losses occurred in professional and business services (-57,000), other services (-13,000), and manufacturing (-8,000). The services sector accounted for all but 1,000 net jobs.

Company Size Breakdown:

Mid-sized companies (50-499 employees) drove all job creation. Small firms remained flat, while large employers shed 18,000 positions.

Wage Growth:

Workers remaining in their current positions saw wage growth hold steady at 4.5%, unchanged from December.

Market Implications:

The weak hiring data continues the "low-hire, low-fire" trend from late 2025, suggesting a sluggish labor market that may prompt Federal Reserve concerns about providing additional economic support. The employment weakness could influence monetary policy decisions ahead.

Timing Note:

The Bureau of Labor Statistics' official nonfarm payrolls report, typically released Friday, faces delays due to a partial government shutdown, making the ADP data particularly significant for market participants.