US private employers add 22,000 jobs in January, far below estimates: ADP

• Without education and health services' 74,000 job gains, overall employment would have been negative; professional and business services lost 57,000 jobs while manufacturing shed 8,000
• Wage growth moderated slightly, with job-switchers seeing 6.4% year-over-year raises (down from 6.6%) and job-stayers maintaining 4.5% growth
• The labor market remains in a 'low-hire, low-fire' environment; mid-sized firms drove all net gains while large employers cut 18,000 positions and small businesses showed no change

Summary

Key Employment Figures

US private employers added only 22,000 jobs in January 2026, significantly missing the Dow Jones forecast of 45,000 and falling below December's downwardly revised 37,000 jobs. According to ADP's report released February 4, 2026, the labor market remains in a "low-hire, low-fire" environment where companies avoid both expansion and layoffs.

Sector Performance

Employment gains were concentrated in education and health services, which added 74,000 positions—the primary driver preventing overall negative growth. Construction contributed 9,000 jobs, while financial activities, leisure/hospitality, and transportation saw modest increases.

Significant losses occurred in professional and business services (-57,000 jobs), manufacturing (-8,000), and other services (-13,000). Mid-sized firms (50-499 employees) accounted for all net gains, while large employers cut 18,000 positions and small businesses showed no change.

Wage Data

Wage growth moderated slightly. Job-switchers saw 6.4% year-over-year pay increases (down from 6.6% in December), while workers staying in their roles experienced 4.5% wage growth (unchanged). This cooling may ease inflation concerns but raises questions about broader economic momentum.

Market Implications

The weak hiring data compounds uncertainty around official Bureau of Labor Statistics figures, delayed by a partial government shutdown. Federal Reserve Chair Jerome Powell indicated labor conditions may be stabilizing, with the Fed maintaining its benchmark rate at 3.50%-3.75%.

Economists attribute cautious hiring patterns to import tariffs and artificial intelligence adoption, contributing to uneven job creation across sectors. The concentration in services versus cyclical sectors signals ongoing economic fragility.