Private payrolls up 205K in January: ADP/Moody's

New York's Wall Street.
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New York's Wall Street.

Job growth in the private sector slowed a bit in January as larger companies hired fewer workers than the previous month and manufacturing jobs were flat, according to the latest report from ADP and Moody's Analytics.

Still, the 205,000 new positions was better than estimates from Wall Street economists.

Strong job growth again came from service providers, who were responsible for 192,000 of the total, with financial firms adding a net 19,000 workers for the biggest gain since March 2006. The hiring gains came despite a brutal month in the financial markets, with the S&P 500 off to its worst start since 2009.

Economists expected ADP to report private sector payrolls had increased by 195,000 in January, down from the upwardly revised 267,000 reported a month earlier.

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The ADP report serves as a precursor for the closely watched monthly nonfarms payroll report, which is expected to show the economy added 200,000 positions and the unemployment rate held steady at 5 percent.

Medium-sized firms, with 50 to 499 employees, represented the largest contributor with 82,000 jobs, while companies with more than 500 workers added 44,000, just half December's total.

Professional and business services was the leading sector with 44,000, followed by trade, transportation and utilities [35,000) and construction [21,000]. The 13,000 jobs from goods producers represented a sharp decline from the 30,000 in December.

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"Job growth remains strong despite the turmoil in the global economy and financial markets," Mark Zandi, chief economist of Moody's Analytics, said in a statement. "Manufacturers and energy companies are reducing payrolls, but job gains across all other industries remain robust. The U.S. economy remains on track to return to full employment by mid-year."

CORRECTION: An earlier headline misstated the length of time for the job growth on Wall Street. The report said it was the highest gain in Wall Street jobs in 10 years.