ROSELAND, N.J. – The U.S. private sector started 2026 on shaky ground, adding just 22,000 jobs in January, according to the latest ADP National Employment Report released Wednesday. The lackluster performance marks a sharp deceleration in the labor market, even as wage growth remains stubbornly stable.
The report, produced by the ADP Research Institute in collaboration with the Stanford Digital Economy Lab, paints a picture of a “two-speed” economy. While the education and health services sector propped up the numbers by adding 74,000 positions, other major industries saw significant pullbacks.
Sector Slump and Manufacturing Woes
The manufacturing sector continued its downward spiral, losing 8,000 jobs in January. According to ADP, manufacturing has now shed positions every month since March 2024. Even more striking was the hit to professional and business services, which saw a massive decline of 57,000 jobs.
“Job creation took a step back in 2025, and that trend is bleeding into the new year,” said Dr. Nela Richardson, chief economist at ADP. “While we’ve seen a continuous and dramatic slowdown in job creation for the past three years, wage growth has remained stable.”
The Pay Paradox
Despite the hiring freeze, workers who stayed in their current roles saw their pay rise by 4.5% year-over-year. For those who switched jobs, the “pay bump” began to lose some steam, slowing to a 6.4% annual increase compared to 6.6% the previous month.
Financial activities saw the highest pay gains for “job-stayers” at 5.2%, while the information and “other services” sectors trailed at 4.1%.
Regional and Business Divergence
The labor market’s cooling was not felt equally across the country:
- The Midwest and Northeast remained resilient, adding 25,000 and 17,000 jobs, respectively.
- The South and West both dipped into negative territory, losing 10,000 and 11,000 jobs. The South Atlantic region was particularly hard hit, reporting a loss of 76,000 positions.
Business size also played a role in the January stagnation. Medium-sized establishments (50-499 employees) were the primary engine of growth, adding 41,000 jobs. In contrast, large corporations with more than 500 employees trimmed their headcounts by 18,000.
A Look Ahead
The January report included an annual revision to align with benchmark data, highlighting a long-term cooling trend: private employers added just 398,000 jobs in all of 2025, a steep drop from the 771,000 added in 2024.
Economists will now look to Friday’s official government jobs report from the Bureau of Labor Statistics to see if the federal data confirms ADP’s findings of a significantly slowing American workforce.