A month after reporting the first loss since April, the employment picture rebounded in January as companies created 174,000 new jobs. This emerged from a report by the contract processing company ADP on Wednesday.
The profit surpassed the Dow Jones polled estimate of 50,000 economists and improved from December’s 78,000 decline, a number revised from the originally reported 123,000 decline.
“The labor market is only slowly recovering in the face of headwinds from COVID-19,” said Ahu Yildirmaz, vice president and co-head of the ADP research institute.
Service-related businesses accounted for 156,000 of total profits, led by health and social assistance with 48,000 and professional and business services with 40,000.
The ailing leisure and hospitality industry, which has still lost around 4 million jobs since the pre-pandemic, grew by 35,000 in the course of the month, according to ADP. This is because some governments relaxed restrictions on vacation as cases in Covid increased.
On the commodity side, the construction industry created 18,000 jobs, while manufacturing grew by 1,000. Trade, transportation and supply increased by 16,000.
Medium-sized companies with 50 to 499 employees have created the most jobs with 84,000. Small businesses added 51,000 while large businesses added 39,000.
The ADP release comes two days before the Department of Labor’s more detailed report on non-farm payrolls. The Dow Jones estimate for this number is also 50,000, with the unemployment rate expected to remain constant at 6.7%. The December poll showed a loss of 140,000, the first time the economy has lost jobs since the recovery began in May.
While the economy has reclaimed 12.3 million jobs since May, there are still 10.7 million American workers unemployed, more than 5 million more than before the pandemic.