In January, the private sector added 183,000, above estimates of 150,000, according to ADP. To speak more on the fresh labor data, ADP chief economist Nela Richardson joins Wealth to explain that hiring momentum from 2024 carried into the start of 2025, with notable job gains in service sectors like leisure and hospitality.
"So, if you want to know everything you need to know about the labor market, follow the consumer, because the businesses that support consumers and in consumer facing industries are the ones showing strength right now," Richardson emphasizes. She also notes how manufacturing and construction saw declines, signaling a shift in the labor market.
While overall wage growth remains solid at 4.7%, she states it poses a challenge for the Federal Reserve as it contributes to persistent inflationary pressures: "It could be a challenge for the Federal Reserve because labor costs aren't going down. They're staying stuck at higher levels, which translates into sticky inflation."
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The US Bureau of Labor Statistics will be reporting non-farm payroll jobs data this Friday, February 7.
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This post was written by Josh Lynch