Private sector employment fell by a stunning 301,000 jobs in December, according to payroll giant ADP, which attributed the precipitous decline to the omicron variant of COVID-19.
The number represents a dramatic reversal from December, when ADP reported a gain of 807,000 jobs (
The service-providing sector lost 274,000 jobs, including 154,000 in leisure and hospitality, 3,000 in professional and business services like accounting and auditing, and 9,000 in financial activities such as banking. The goods-producing sector lost 27,000 jobs, including 21,000 in manufacturing and 10,000 in construction. Franchises gained 1,600 jobs in January.
The job declines were the steepest seen by ADP since December 2020. “The pullback in hiring was far-ranging,” said ADP chief economist Nela Richardson during a conference call Wednesday with reporters. “It was not industry-specific. There was an idiosyncratic slowdown. Nearly every industry posted a loss. This suggests that the market was affected by this macro pandemic event that had widespread impacts, including temporary business closures and high worker absenteeism as people fell sick or tried to avoid getting sick. Hence firms were hit by two significant cross-currents in January: surging COVID cases and labor shortages. However, there is good evidence to suggest that the January report represents a speed bump, not a roadblock as we make progress on the jobs recovery.”
She pointed out that December data from the U.S. Bureau of Labor Statistics indicated that job openings remain at a record high, pointing to strong hiring demand heading into 2022. In addition, small-business surveys conducted by ADP in mid-December showed that over 40% of firms with less than 50 employees, and 53% of firms with an employee size between 50 to 500 employees, planned to add headcount in the next six months.
