Private Sector Employment Rises by 183,000 in January

[ResidentialBusiness]

Private-sector employment increased by 183,000 jobs in January, according to the latest ADP National Employment Report, produced in collaboration with the Stanford Digital Economy Lab. The report, based on payroll data from more than 25 million U.S. employees, also showed that annual pay grew by 4.7% year-over-year.

Job Growth Trends and Industry Breakdown

While hiring momentum from late 2024 carried into January, growth was uneven across industries. Consumer-facing sectors led the expansion, while business services and manufacturing posted weaker results.

Industry Employment Changes:

• Goods-producing sectors: -6,000 jobs
  • Natural resources/mining: +4,000
  • Construction: +3,000
  • Manufacturing: -13,000
• Service-providing sectors: +190,000 jobs
  • Trade/transportation/utilities: +56,000
  • Leisure/hospitality: +54,000
  • Education/health services: +20,000
  • Professional/business services: +14,000
  • Information: +18,000
  • Financial activities: +13,000
  • Other services: +15,000

Regional Employment Changes

• Northeast: +22,000
• Midwest: +64,000
• South: +50,000
• West: +70,000

Job Growth by Business Size

• Small businesses (1-49 employees): +39,000
• Medium businesses (50-499 employees): +92,000
• Large businesses (500+ employees): +69,000

Pay Insights: Stability in Wage Growth

Annual pay increases remained steady in January.

• Job-stayers saw a median annual pay increase of 4.7%.
• Job-changers experienced a 6.8% wage increase.

Median Annual Pay Growth by Industry (Job-Stayers):

• Construction: 5.0%
• Manufacturing: 4.9%
• Education/health services: 5.0%
• Leisure/hospitality: 4.8%
• Financial activities: 5.0%

Median Annual Pay Growth by Firm Size (Job-Stayers):

• Small firms (1-19 employees): 2.9%
• Medium firms (50-249 employees): 5.0%
• Large firms (500+ employees): 5.0%

Labor Market Outlook

Despite strong overall job growth, disparities remain across industries, and some sectors continue to face hiring challenges.

“We had a strong start to 2025 but it masked a dichotomy in the labor market,” said Nela Richardson, chief economist at ADP. “Consumer-facing industries drove hiring, while job growth was weaker in business services and production.”

Image: ADP

This article, "Private Sector Employment Rises by 183,000 in January" was first published on Small Business Trends

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