ADP, the payroll processor, reported that private-sector payrolls dropped by over 300,000 in January, giving rise to fears of a disappointing jobs report when official government statistics are released later this week.
According to ADP's chief economist, Nela Richardson, at the start of 2022, the labor market recovery slowed due to the Omicron variant and its significant, though temporary, impact on employment.
"After substantial gains in fourth-quarter 2021, the majority of industry sectors have lost jobs. Tourism and hospitality experienced the biggest drop after substantial gains in the fourth quarter of 2021. Small businesses, on the other hand, took the biggest hit, losing most of the jobs gained in December 2021,” Richardson said.
According to ADP, official payroll numbers will be released by the Bureau of Labor Statistics on Feb. 4. The ADP reports are usually looked upon as a predictor of these numbers, which tend to move the market.
Gary Black, the Managing Partner at the Future Fund LLC, predicts that we will witness the same weakness when the government releases official payroll figures on Friday. The BLS will release its latest report on Friday, according to Ansari, and analysts expect U.S. employers to have added 150,000 jobs in January after adding 199,000 in December.
In that vein, White House Press Secretary Jen Psaki said on Monday that workers may have missed time from work due to Omicron illness, which may account for a large part of jobs reported in the month's jobs report.
2 Feb 2022
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