U.S. private employers resumed hiring in January amid signs that new COVID-19 cases are falling and state governments are lifting lockdown measures implemented to curb the spread of the virus, according to the ADP National Employment Report released Wednesday.
The report showed that companies added 174,000 jobs last month, topping the 49,000-job increase that economists surveyed by Refinitiv had predicted. The increase followed a decline of the upwardly revised 78,000 in December, the first time that employment shrank since the early days of the pandemic.
“The labor market continues its slow recovery amid COVID-19 headwinds,” Ahu Yildirmaz, vice president and co-head of the ADP Research Institute, said in a statement. “Although job losses were previously concentrated among small and midsized businesses, we are now seeing signs of the prolonged impact of the pandemic on large companies as well.”
The job losses were concentrated heavily in services-related businesses, which accounted for 156,000 of the total gain. Education and health services led those businesses with 54,000 new jobs created, while professional and business services added 40,000 positions. The leisure and hospitality industry, one of the hardest hit by the pandemic, saw its payroll increase by 35,000 last month.
The goods-producing sector, meanwhile, added 19,000 jobs with the bulk — 18,000 — stemming from construction.
Medium businesses with 50 to 499 employees created the most jobs, expanding payroll by 84,000 last month. Small businesses added 51,000 jobs, and large businesses created just 39,000.
The ADP report precedes the Labor Department’s more closely watched jobs report, due Friday at 8:30 a.m. ET, which is predicted to show the U.S. economy added 50,000 jobs last month, up from December’s loss of 140,000. Analysts anticipate unemployment will hold steady at 6.7%.