US private sector job growth came in at roughly half of market expectations, reaffirming a slowdown in American employment amid ongoing mass layoffs in the technology sector driven by artificial intelligence adoption.
ADP, the US payroll processing company, reported Tuesday that private employers added just 22,000 jobs in January, falling far short of the market forecast of 45,000. Professional and business services led the decline with 57,000 job losses, followed by other services (13,000) and manufacturing (8,000). "Job losses were notable across most sectors," CNBC reported.
Wage growth also moderated. The average annual pay increase for workers who stayed in their jobs held steady at 4.5 percent, unchanged from December.
The ADP report drew heightened attention as the January nonfarm payrolls data, originally scheduled for release on Thursday, was postponed due to a partial federal government shutdown. The employment figures are closely watched as they significantly influence the Federal Reserve's interest rate decisions. A standoff between Democrats and Republicans over immigration enforcement funding delayed budget negotiations, forcing the Labor Department and other agencies into a partial shutdown from January 31 through Monday.
With signs of employment weakness continuing to emerge, analysts suggest the data could influence the Fed's cautious stance on rate cuts.