It is enough to make financial markets nervous this morning.
This morning, the ADP Research Institute report on private company jobs showed a big decline of 301,000 jobs in January. Economist surveyed by Bloomberg were looking for an increase of 180,000. The drop in the ADP survey is the first in more than year.
The ADP report doesn’t very closely track the official government jobs report due on Friday. But a big drop instead of an expected modest gain is a big negative for Friday’s report.
Especially because economist and the stock market have been trying to get a handle on how much damage the Omicron Variant of the COVID-19 virus has done to the U.S. economy in the last couple of months. The extent to that damage is a big factor in the Federal Reserve’s decision raise interest rates-and by how much–at the central bank’s March meeting.
Not surprisingly, service-related industries took the biggest ht in the ADP report. Leisure and hospitality jobs fell by more than 150,000 in January, unwinding some recent gains during the recovery. This was followed by trade, transportation and utilities jobs, which together declined by 62,000 in January. Education and health services payrolls fell by 15,000.
But manufacturing didn’t escape all damage. Manufacturing payrolls dropped in January by 21,000 and 10,000.
Economist are projecting that the official jobs numbers on Friday will show a gain of 150,000 for January. That would be a relatively weak monthly gain for the economy.
