Private sector job growth blows past Wall Street's expectations in January with 291,000 added
Economists expected the private sector to add 156,000 jobs in January
Private employers added 291,000 jobs in January, soaring past economists' expectations for the best monthly gain in more than five years, according to the latest ADP National Employment Report.
The total far exceeded the 156,000 jobs that economists surveyed by Refinitiv were expecting.
"Mild winter weather provided a significant boost to the January employment gain," Moody's chief economist Mark Zandi said in a statement. "The leisure and hospitality and construction industries in particular experienced an outsized increase in jobs."
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Growth was spread across a swath of sectors, boosted by the services-providing sector, which accounted for 237,000 new positions created last month, while the goods-producing sector added 54,000.
In particular, construction posted a 47,000 bounce, the best monthly gain since April. The manufacturing sector expanded its payroll by 10,000. Education and health services also accounted for 70,000 jobs, while the leisure and hospitality sector added 96,000 to the total number.
Leisure and hospitality and construction are among the most sensitive industries to weather, Zandi said during a conference call with reporters.
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"My guess is that extracting from the vagaries of this data, and it goes beyond weather, underlying job growth is probably somewhere around half the size of the January gain, probably around 150,000 jobs." That estimate, he said, is stable enough to maintain a record-low level of unemployment.
Wednesday's report included a slight downward revision in December's numbers. The ADP Research Institute said the private sector added 199,000 two months ago, down from the 202,000 jobs initially reported.
The data precedes the release of more closely watched update from the Labor Department on Friday, which is expected to show the U.S. economy added 160,000 jobs last month. Analysts anticipate unemployment will hold steady at 3.5 percent, a half-century low. In December, the U.S. added a slightly lower-than-expected strong 145,000 jobs.