Private businesses in the US added 183K workers to their payrolls in January 2025, surpassing the upwardly revised 176,000 jobs added in December 2024 and exceeding forecasts of 150,000.
US private employment tops forecasts
This strong performance reflected the continuation of hiring momentum from the fourth quarter of 2024 into the new year, with a few notable exceptions, particularly in manufacturing. Nela Richardson, Chief Economist at ADP, noted, “We had a strong start to 2025, but it masked a dichotomy in the labor market. Consumer-facing industries drove hiring, while job growth was weaker in business services and production.”
What made the overall figures
The service-producing sector was a major driver of job creation, adding 190,000 positions, led by significant gains in trade, transportation, and utilities (56,000), followed by leisure and hospitality (54,000). Other sectors contributing to the growth included education and health services (20,000), information (18,000), professional and business services (14,000), and financial activities (13,000). In contrast, the goods-producing sector saw a decline of 6K jobs, primarily due to a loss of 13K jobs in manufacturing, which offset job gains in natural resources and mining (4K) and construction (3,000).
Further details
Additionally, compensation trends indicated continued upward pressure on wages. Annual pay growth for job-stayers reached 4.7%, while pay growth for job-changers was even higher at 6.8%. This disparity suggests that workers willing to switch jobs continue to see more significant wage increases, highlighting a tight labor market where employers are facing competition for talent. Despite challenges in certain sectors, overall job growth in January provided a positive start to the year, pointing to ongoing strength in the US labor market.
