The Wednesday report—viewed by some as a leading indicator of what the government’s monthly jobs report (coming Friday) might say—showed private sector employment increased by 174,000 in January on a seasonally-adjusted basis. That’s nearly four times greater than the 44,500 median estimate of economists polled by Moody’s Analytics. The report, created by the research arm of payroll company ADP, is often relied on as somewhat of a predictor for what the Bureau of Labor Statistics will report, though it doesn’t reflect government payrolls and is estimated differently. This month it also may be skewed by the seasonal adjustments, according to Andrew Grantham, an economist at CIBC World Markets. The figures change the trajectory after December job losses marked the first decline in monthly payrolls since April. But they still reflect a labor market recovering slowly amid the pandemic, said Ahu Yildirmaz, vice president and co-head of the ADP research arm. Excluding December’s drop of 78,000, the 174,000 gain is the smallest increase in private payrolls since April. “The labor market recovery remains on uneasy footing,” Moody’s Dante DeAntonio wrote after the report was released. Economists are predicting the BLS will report a gain in overall nonfarm payrolls in January, though estimates vary widely, with one poll showing a median increase of 50,000, and Moody’s forecasting a gain of 275,000 jobs.
