ADP Tries Blaming Weather for Lower Payrolls

Wednesday's ADP Private Sector Payrolls report showed a gain of 175,000 in January. Dow Jones was calling for 189,000 and Bloomberg was calling for 170,000. While there has to be some merit to the report, it is hard to see the endless blame game on the weather.

Keep in mind that the December gain from ADP was 238,000, but that preceded a very disappointing number of not even 100,000 payrolls counted by the Labor Department. This is lower than last month, but it remains to be seen if the Labor Department revisions were really as bad as the first report signaled.

ADP showed that 75,000 payrolls came from small businesses, another 66,000 from medium-sized businesses and 34,000 from large businesses. The United States is still a services economy — some 160,000 of the jobs came from the services sectors.

An additional breakdown is as follows:

ADP said that goods-producing employment rose by 16,000 jobs in January. This is down from a downwardly revised figure of 50,000 in December. Manufacturing lost jobs in January, with a decline of 12,000, after a revised gain of 16,000 in the prior month, and it was the first decline in industry payrolls since July 2013.

ADP is trying to blame the weather in part. Mark Zandi, chief economist of Moody's Analytics, said:

Cold and stormy winter weather continued to weigh on the job numbers. Underlying job growth, abstracting from the weather, remains sturdy. Gains are broad based across industries and company sizes, the biggest exception being manufacturing, which shed jobs, but that is not expected to continue.

As noted in our unemployment report preview for Friday, this week is going to be rather confusing, based on the extended unemployment benefits no longer being included.

Filed under: Jobs