January Employment Report Unveiled: A Mixed Picture
The recent employment report has brought to light that private sector employment saw an increase of 22,000 jobs in January, alongside a notable pay increase of 4.5 percent year-over-year. This report, produced by ADP Research and the Stanford Digital Economy Lab, serves as a crucial indicator of the labor market's current state.
Understanding the Employment Trends
ADP's National Employment Report provides insights based on the anonymized payroll data of over 26 million private-sector employees across the country. The report combines job creation data with pay insights from around 15 million individual pay change observations monthly. Such data offers a comprehensive view of the labor market's health.
Insights from Dr. Nela Richardson
Dr. Nela Richardson, the chief economist at ADP, noted the slowdown in job creation during 2025, highlighting that private employers added only 398,000 jobs compared to the 771,000 added in 2024. This trend shows a significant deceleration in job growth over recent years, while wage growth has remained resilient and stable.
Highlights from the January Report
During January, the education and health services sector was a notable performer by adding 74,000 jobs, contrasting with declines in the manufacturing and professional services sectors. The overall job gains reflect a complicated hiring environment.
Key Job Changes: 22,000 jobs added
Breakdown by Industry
Goods-Producing Sector: 1,000 jobs
- Natural Resources/Mining: 0
- Construction: 9,000
- Manufacturing: -8,000
Service-Providing Sector: 21,000 jobs
- Trade/Transportation/Utilities: 4,000
- Information: -5,000
- Financial Activities: 14,000
- Professional/Business Services: -57,000
- Education/Health Services: 74,000
- Leisure/Hospitality: 4,000
- Other Services: -13,000
Regional Employment Variations
Examining regional statistics provides a broader perspective on job gains.
Northeast Region
Total change: 17,000 jobs
- New England: 6,000
- Mid-Atlantic: 11,000
Midwest Region
Total change: 25,000 jobs
- East North Central: 8,000
- West North Central: 17,000
South Region
Total change: -10,000 jobs
- South Atlantic: -76,000
- East South Central: 19,000
- West South Central: 47,000
West Region
Total change: -11,000 jobs
- Mountain: 11,000
- Pacific: -22,000
Job Gains by Establishment Size
Reviewing employment changes by establishment size reveals distinct patterns.
Small Establishments: 0
- 1-19 employees: 30,000
- 20-49 employees: -30,000
Medium Establishments: 41,000
- 50-249 employees: 37,000
- 250-499 employees: 4,000
Large Establishments: -18,000
- 500+ employees: -18,000
Pay Insights and Trends
In terms of wage growth, the data revealed that pay for those staying in their jobs increased by 4.5 percent in January, indicating a steady trend. Meanwhile, pay growth for job changers slightly decreased from 6.6 percent to 6.4 percent.
Pay Changes by Job Type
- Job Stayers: 4.5%
- Job Changers: 6.4%
Median Pay Changes by Industry
Goods-Producing:
- Natural Resources/Mining: 4.3%
- Construction: 4.7%
- Manufacturing: 5.0%
Service-Providing:
- Trade/Transportation/Utilities: 4.3%
- Information: 4.1%
- Financial Activities: 5.2%
- Professional/Business Services: 4.3%
- Education/Health Services: 4.4%
- Leisure/Hospitality: 4.7%
- Other Services: 4.1%
Pay Changes by Firm Size
Small Firms:
- 1-19 employees: 2.5%
- 20-49 employees: 4.1%
Medium Firms:
- 50-249 employees: 4.7%
- 250-499 employees: 4.8%
Large Firms:
- 500+ employees: 5.0%
Important Revisions and Upcoming Reports
Recent revisions indicated that the December jobs added was adjusted from 41,000 to 37,000, illustrating the importance of accurate data in understanding employment trends. Moreover, the January report reflects an annual revision by ADP and aligns with the latest Quarterly Census of Employment and Wages (QCEW) data.
Looking ahead, the February 2026 ADP National Employment Report is expected to be available on March 4, 2026. This report will shed more light on the evolving trends in employment and compensation.
About ADP Research
ADP Research is dedicated to enhancing workplace productivity through data-driven insights. Their research serves as a valuable resource for businesses, policymakers, and individuals, helping them navigate the complexities of the modern labor market.
Frequently Asked Questions
What is the current job growth in private sectors?
According to the latest report, private sector employment increased by 22,000 jobs in January.
How much did wages increase?
Wages saw an increase of 4.5% year-over-year for employees staying in their jobs.
What industries added the most jobs in January?
The education and health services sector added the most jobs, with a total of 74,000 new positions.
What was the adjustment made for December job numbers?
The December total job additions were revised from 41,000 to 37,000.
When will the next ADP National Employment Report be released?
The February 2026 report is set to be released on March 4, 2026, at 8:15 a.m. ET.
