Inside the ADP Report for January 2021
Bottom Line: Well, given the year 2020 was we probably shouldn’t have expected good news for the end of it. And based on the ADP private sector jobs report...we didn’t have good news in December. While concerns of a double-dip recession have been looming, the one thing we’d managed to do for six consecutive months was add back jobs lost during the spring lockdowns. That provided hope that we may be able to avoid another recession. That may still prove to be the case as one month worth of job losses doesn’t equal a trend or a recession, however it can start one and that’s now what we have to be mindful of going forward. According to the ADP Report there were 123,000 private sector jobs lost in December. That included...
- Small businesses: -13,000
- Midsized: +37,000
- Large: -147,000
The semi-silver lining is that the majority of the losses came from large businesses which tend to be less of a near-term economic indicator than their smaller counterparts. And it’s encouraging to see that companies in the middle still managed to make progress last month. The bigger concern is that the most economic sensitive companies, small businesses, shed jobs. Maybe some small businesses threw in the towel with increased restrictions in many parts of the country, maybe and hopefully, it’s just a temporary blip. But small businesses are the best leading indicator as to the health of the overall economy and clearly December was challenging.
We saw the pandemic related effects show up in the industries which lost the most jobs last month:
- #1 Leisure & Hospitality
- #2 Trade, transportation and utilities
- #3 Manufacturing
On a more positive note, there were 4,000 construction jobs added – so the housing boom continued to buck the trend during the month. On Friday we’ll get the full picture with government jobs added in. More to come...
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