Private sector job growth exceeded estimates in January, with employers creating 183,000 new positions versus the anticipated150,000. December’s job growth was also revised significantly higher, from 122,000 to 176,000 new jobs.
Medium-sized businesses (50-499 employees) added the largest number of new jobs (+92,000), but growth was seen across all company sizes. Large firms (500+ employees) added 69,000 jobs, while small businesses (<50 employees) added 39,000, which is an encouraging sign after recent trends.
What’s the bottom line?
“We had a strong start to 2025 but it masked a dichotomy in the labor market,” said Nela Richardson, Chief Economist, ADP. “Consumer-facing industries drove hiring, while job growth was weaker in business services and production.”
Salary increases rose slightly for those remaining in their current roles (+4.7% from +4.6%), while they declined for thosechanging jobs (+6.8% from +6.9%). The narrowing gap between pay growth for job stayers and changers suggests a reduction inaggressive talent poaching among companies.
