Payrolls at US companies grew at the slowest pace in two years in January, depressed by inclement weather across much of the country, according to data from ADP Research Institute.
(Bloomberg) — Payrolls at US companies grew at the slowest pace in two years in January, depressed by inclement weather across much of the country, according to data from ADP Research Institute.
Private payrolls rose 106,000 last month, according to figures out Wednesday from ADP in collaboration with Stanford Digital Economy Lab. The number trailed all estimates in a Bloomberg survey of economists.
Payrolls were held back by declines in businesses with fewer than 50 employees, and goods-producing industries like mining and construction also shed jobs. Regionally, the biggest drops were in the Midwest, where severe winter storms roiled most of the region, and the Pacific.
“In January, we saw the impact of weather-related disruptions on employment during our reference week,” Nela Richardson, chief economist at ADP, said in a statement. “Hiring was stronger during other weeks of the month, in line with the strength we saw late last year.”
Workers who stayed in their jobs experienced a 7.3% pay increase in January from a year ago, unchanged from the prior month, the ADP data showed. For those who changed jobs, the median increase in annual pay accelerated to 15.4%.
That’s in contrast with other data that show wage gains are easing. US employment costs rose at a slower-than-expected pace in the closing months of 2022, and the Atlanta Fed’s wage growth tracker cooled to 6.1% in December, the lowest since May.
Average hourly earnings are also forecast to have moderated further in January, ahead of the government’s employment report to be released Friday. It’s expected to show solid hiring solid and historically low unemployment as well.
Ahead of the Fed
Because of the distortions from the weather, it’s difficult to interpret the data with any certainty. The release comes ahead of the Federal Reserve’s policy meeting later this afternoon.
Officials are widely expected to further slow the pace of rate hikes to 25 basis points, but Chair Jerome Powell is likely to reiterate the Fed’s effort to quell inflation is far from over.
Data out later this morning is forecast to show US job openings stayed elevated at 10.3 million in December.
ADP, which updated its methodology last year, bases its figures on payroll data of more than 25 million US workers.
–With assistance from Kristy Scheuble and Reade Pickert.
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