Energy Industry Slowdown Dampens January Hiring

ADP Report 1.2015After adding a hefty 253,000 jobs in December, private employers slowed their hiring in the first month of the year, adding an estimated 213,000 jobs in January.

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.

John Zappe is the editor of TLNT.com and a contributing editor of ERE.net. John was a newspaper reporter and editor until his geek gene lead him to launch his first website in 1994. He developed and managed online newspaper employment sites and sold advertising services to recruiters and employers. Before joining ERE Media in 2006, John was a senior consultant and analyst with Advanced Interactive Media and previously was Vice President of Digital Media for the Los Angeles Newspaper Group.

Besides writing for ERE, John consults with staffing firms and employment agencies, providing content and managing their social media programs. He also works with organizations and businesses to assist with audience development and marketing. In his spare time  he can be found hiking in the California mountains or competing in canine agility and obedience competitions.

You can contact him here.

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