The National Employment Report from HR services company ADP and its partner Moody’s Analytics was below consensus forecasts from economists who had pegged the increase between 220,000 and 240,000. The report also revised up the initial December count from 241,000 to 253,000.
Mark Zandi, chief economists for Moody’s, blamed cuts in the energy industry for the slower-than-expected growth. “Businesses in the energy and supplying industries are already scaling back payrolls in reaction to the collapse in oil prices, while industries benefiting from the lower prices have been slower to increase their hiring,” he said, optimistically adding, “All indications are that the job market will continue to improve in 2015.”
A second report Wednesday from TrimTabs Investment Research estimated the gain in January between 190,000 and 220,000.
Both reports suggest that the official government count to be released Friday may also fall short of economist predictions. Consensus estimates expect the report from the U.S. Bureau of Labor Statistics to show the economy added about 237,000 non-farm private and government jobs in January. The unemployment rate is predicted to remain at 5.6 percent or decline slightly.
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The biggest change in hiring, according to ADP, was among the smallest employers — those with fewer than 50 workers. Small businesses have been a jobs engine throughout the recovery, typically adding more workers monthly than larger employers. In January, small business employers added 78,000 jobs, down from December’s 115,000.
In contrast, mid-sized businesses — those with 50-499 workers — grew hiring to 95,000 in January from December’s 78,000. Employers with more than 500 workers added 40,000 jobs, off by 21,000 from December.