U.S. private payrolls rise by more than expected in January

Published 02/05/2025, 08:20 AM
Updated 02/05/2025, 08:40 AM
© Reuters

Investing.com - Private employers in the U.S. hired more workers than anticipated in January, in a sign of stability in labor demand at the start of 2025.

Private payrolls increased by 183,000 during the month, according to data from payrolls processor ADP on Wednesday. Economists had anticipated a reading of 148,000. Meanwhile, the December total was upwardly revised by 54,000 to 176,000.

The numbers serve, along with a raft of other labor market data this week, to help paint a picture of the U.S. labor market in the early days of the first quarter.

Data on Tuesday showed that U.S. job openings in December decreased by more than anticipated, pointing to a downward trend that could dampen wage growth. This would serve as evidence for a prior argument from the Federal Reserve that the labor market is not fueling upward pressure on inflation, and bolster the central bank's effort to achieve a soft landing for the wider economy.

In January, the Fed chose to leave interest rates unchanged at a range of 4.25% to 4.5%, pushing pause of a series of recent borrowing cost reductions. Policymakers also signaled that they would take a wait-and-see approach to further cuts due to signs of a steady labor market and broader uncertainty around the impact of policy changes under the new Trump administration.

Investors will next have the chance to parse through weekly initial jobless claims figures on Thursday, followed by the all-important nonfarm payrolls report on Friday. The U.S. economy is tipped to have added 154,000 roles in January, down from 256,000 in the prior month, while the unemployment rate is seen matching December's pace of 4.1%.

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