According to ADP, January saw companies cut their jobs for the first time since last year. This was due to the fact that the omicron spread seemed not only to have affected hiring.

Private payrolls dropped by 301,000 month-end, which is below the Dow Jones estimates for growth at 200,000. It was a sharp drop from last year. downwardly revised 776,000 gain in December.ADP had not reported any negative job growth in December 2020, it was their first such report.

More than half of the drop was due to the pandemic-sensitive hospitality and leisure industry, with companies reporting a decrease in revenue by 154,000. The other service category saw a decline of 23,000. Trade, utilities and transportation had a 62,000 reduction.

The manufacturing sector also saw 21,000 job losses, and education and healthcare reported 15,000 less. Construction fell by 10,000.

274k job losses were attributed to service-providing sectors, while 274,000 jobs lost by goods producers.

Nela Richardson (ADP chief economist) stated, “The labor market rebound took a significant step back at 2022’s start due to the effect from the omicron variant” and its likely temporary but substantial impact on job growth.

ADP data are available two days prior to the Labor Department’s closely-watched nonfarm payrolls numbers. Wall Street anticipates the report will show only 150,000 job gains, but economists are more optimistic. White House officials are warningThe Labor Department’s statistical and omicron effects on the compilation of the monthly report could cause the numbers to be a bit rough.

Although ADP may have reported a low number on Friday, they can still be quite different. In December alone, ADP’s total — initially put at 807,000 before the revision — was well above the Bureau of Labor Statistics’ count of 211,000 for private payrolls and 199,000 for the total nonfarm number.

Small businesses suffered the most, losing 144,000 jobs. Medium-sized businesses lost 59,000, and those with over 500 employees suffered a loss of 98,000.

Federal Reserve officials closely monitor the employment numbers. According to policymakers, they believe the U.S. is close to full employment. have teed up a series of interest rate increasesThis year.