Employment in the US private sector rose by 107,000 jobs in January, according to the ADP National Employment Report released today. However, CNBC reported the figure is lower than the downwardly revised 158,000 in December 2023 and falls below the Dow Jones estimate for 150,000, indicating a potential slowdown in the US labor market for the year.

ADP noted that the hiring slowdown observed in 2023 continued into January.

Pay growth also continued to shrink, according to the report. It found the median change in annual pay for those changing jobs was 7.2%, the smallest annual gain since May 2021.

For those staying in their jobs, the median change in annual pay was 5.2% in January, down from 5.4% in December 2023.

“Progress on inflation has brightened the economic picture despite a slowdown in hiring and pay,” Nela Richardson, chief economist at ADP, said in a press release. “Wages adjusted for inflation have improved over the past six months, and the economy looks like it’s headed toward a soft landing in the US and globally.”

The report also found that small businesses gained 25,000 jobs in January, while midsize and large establishments added 61,000 and 31,000 jobs, respectively.

Here are the estimates of employment growth by industry:

• Goods-producing, up 30,000
  • Natural resources/mining, up 6,000
  • Construction, up 22,000
  • Manufacturing, up 2,000
• Service-providing, up 77,000
  • Trade/transportation/utilities, up 23,000
  • Information, down 9,000
  • Financial activities, up 7,000
  • Professional/business services, up 2,000
  • Education/health services, up 17,000
  • Leisure/hospitality, up 28,000
  • Other services, up 9,000

Total private-sector employment in the US was nearly 131.3 million in January, according to the report.

The ADP National Employment Report, produced by the ADP Research Institute in collaboration with the Stanford Digital Economy Lab, uses ADP’s anonymized and aggregated payroll data of more than 25 million US employees to provide a representative picture of the labor market. The report details the current month’s total private employment change and weekly job data from the previous month.