US private sector added 291,000 jobs

Private-sector, nonfarm employment grew by 291,000 jobs from December 2019 to January 2020, said payroll processor ADP on Wednesday in its national monthly employment report.

Analysts polled by The Wall Street Journal expected the economy to add 150,000 jobs.

“Mild winter weather provided a significant boost to the January employment gain,” said Mark Zandi, chief economist at Moody’s Analytics, in a statement. “The leisure and hospitality and construction industries in particular experienced an outsized increase in jobs.”

He said the expanded payrolls are “consistent with low and stable unemployment”.

The US unemployment rate is 3.5 percent, near a 50-year low. President Donald Trump touted the strong economy in his State of the Union address to Congress on Tuesday and is expected to highlight strong employment in his re-election campaign this year.

Employment expanded in a number of sectors and across small and large companies, the report said.

ADP said small companies, or those with 49 or fewer workers, added 94,000 employees — the strongest performance in 18 months.

Medium-size businesses, or those with 50 to 499 workers, added 128,000 jobs.

Large companies, those with 500 or more employees, added 69,000 jobs.

The service sector added 237,000 jobs, much higher than the 54,000 jobs added by goodsproducing companies, including construction, which added 47,000. Manufacturing added 10,000 jobs. But employment in mining and natural resource extraction fell by 2,000, ADP said.

Leisure and hospitality companies hired 96,000 new workers.

Professional and business services added 49,000 jobs, while healthcare/social assistance added 47,000, and education added 24,000 jobs, ADP said.

The US Labor Department will release its January jobs report Friday. Economists expect it to show the addition of 158,000 new jobs and foresee no change in the nation’s unemployment rate.

The ADP and government surveys use different methodologies and therefore don’t necessarily conflict. The Labor Department derives its figures from a nationwide survey. The ADP Research Institute’s monthly job report is based on anonymous payroll data drawn from the company’s 411,000 US private-sector clients employing about 24 million workers.

The Federal Reserve cut interest rates three times in 2019 amid a worldwide economic slowdown and fallout from the US-China trade dispute. The target rate is now 1.50 to 1.75 percent.

The Fed left rates unchanged after its January meeting and has downplayed the possibility of additional cuts in the immediate future. The rate cuts followed nine rate increases since December 2015, including four in 2018.

The leisure and hospitality and construction industries in particular experienced an outsized increase in jobs.” Mark Zandi, chief economist at Moody’s Analytics