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U.S. Private Payrolls Increase by Only 22,000 in January 2026

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Briefs Finance
Published Feb 4, 2026
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A construction helmet and briefcase sit on a surface with gears, next to a chart showing a sharp rise followed by a downward red arrow—reflecting January 2026 U.S. private payrolls—inside an empty industrial warehouse.
Summary:

  • Private payrolls rose by just 22,000 in January, missing the forecast of 45,000.
  • The January increase is lower than the revised 37,000 jobs added in December 2025.
  • A surge of 74,000 hires in education and health services drove most of the job growth.

Weak Job Growth in January

The U.S. labor market showed minimal growth in January 2026, with private companies adding only 22,000 jobs, according to a report from ADP.

This number fell short of the Dow Jones consensus forecast, which expected an increase of 45,000 jobs. The total job growth for January was also lower than the downwardly revised figure of 37,000 jobs added in December 2025.

Key Contributors to Job Growth

The primary driver for the increase in January was a surge of 74,000 hires in the education and health services sector. Without this boost, the overall job growth would have been negative.

Other sectors contributed to job growth as well, with financial activities adding 14,000 positions, construction increasing by 9,000, and both trade, transportation, and utilities and leisure and hospitality sectors contributing 4,000 jobs each.

Job Losses in Various Sectors

Despite some sectors showing growth, several reported losses. The professional and business services sector experienced a significant drop, losing 57,000 jobs in January.

Additionally, the other services category lost 13,000 jobs, and manufacturing saw a decrease of 8,000 jobs. Most job gains came from the services sector, indicating a lopsided recovery.

Employment Trends Among Different Company Sizes

In terms of company size, businesses with 50 to 499 employees were the only group to add jobs, while small firms remained flat. Large employers, however, reduced their workforce by 18,000 jobs.

This trend suggests that medium-sized companies are currently more stable compared to larger businesses.

Wage Growth Unchanged

Wage growth for employees who kept their jobs remained steady, with an increase of 4.5% from December 2025. This consistent wage growth may offer some relief to workers in a challenging labor market.

Impact of Government Shutdown on Data Releases

The ADP report typically precedes the Bureau of Labor Statistics (BLS) nonfarm payrolls report, which is usually released shortly after.

However, due to a partial government shutdown, the release of the BLS report has been delayed. This situation leaves many analysts and investors waiting for more comprehensive data on the job market.

What This Means for the Future

The lackluster job growth and ongoing challenges the labor market faces may raise concerns among Federal Reserve policymakers about the need for additional economic support.

As the economy continues to show signs of weakness, the focus will likely remain on employment trends and their implications for monetary policy moving forward.

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