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ADP Says US Private Sector Added 175,000 Payrolls in January

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ADP Says US Private Sector Added 175,000 Payrolls in January

Job growth in the US private sector eased in January, as severe weather slowed the pace of hiring in the manufacturing and financial services sector.

Private payrolls last month rose at a seasonally adjusted pace of 175,000, the ADP Institute reported today. The figure, which was in-line with the 2013 monthly average, was slightly below forecasts, which called for 180,000. The US economy added 227,000 private jobs in December, according to ADP data. The number is in stark contrast to official payroll data provided by the Labor Department, which reported only 74,000 new jobs in December. The Labor Department will release official January employment figures Friday.

Job growth last month was concentrated mainly in the service economy, where payrolls rose by 160,000. Employment in professional and business services increased 49,000, while trade and transportation payrolls rose 30,000. After two consecutive months of growth, financial services employment was flat.

Goods producers added only 16,000 payrolls last month due to a steep fall in manufacturing employment. Manufacturers shed 12,000 jobs last month, as severe weather continued to disrupt production plans. Nearly all of the growth in the goods-producing economy came from the construction sector, which added 25,000 payrolls last month.

“Cold and stormy winter weather continued to weigh on the job numbers,” said Mark Zandi, chief economist at Moody’s Analytics. “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.”

The ADP numbers should be taken with a grain of salt. While the payroll processor has done a fairly good job of mimicking official payroll data, last month’s release saw the biggest divergence since May 2009.

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