ADP National Employment Report: Private Sector Employment Increased by 183,000 Jobs in January; Annual Pay was Up 4.7%

ROSELAND, N.J., Feb. 5, 2025 /PRNewswire/ -- Private sector employment increased by 183,000 jobs in January and annual pay was up 4.7 percent year-over-year, according to the January ADP^® National Employment Report™ produced by ADP Research in collaboration with the Stanford Digital Economy Lab ("Stanford Lab"). The ADP National Employment Report is an independent measure and high-frequency view of the private-sector labor market based on actual, anonymized payroll data of more than 25 million U.S. employees.

The jobs report and pay insights use ADP's fine-grained anonymized and aggregated payroll data to provide a representative picture of the private-sector labor market. The report details the current month's total private employment change, and weekly job data from the previous month. Because the underlying ADP payroll databases are continuously updated, the report provides a high-frequency, near real-time measure of U.S. employment. This measure reflects the number of employees on ADP client payrolls (Payroll Employment) to provide a richer understanding of the labor market. Beginning January 2025, ADP's Pay Insights measure captures nearly 14.8 million individual pay change observations each month, up from nearly 10 million when it launched.

"We had a strong start to 2025 but it masked a dichotomy in the labor market," said Nela Richardson, chief economist, ADP. "Consumer-facing industries drove hiring, while job growth was weaker in business services and production."

January 2025 Report Highlights*

View the ADP National Employment Report and interactive charts at www.adpemploymentreport.com.

JOBS REPORT

Private employers added 183,000 jobs in January
Hiring momentum in the last quarter of 2024 carried into January with some exceptions, including manufacturing.

Change in U.S. Private Employment:     183,000

Change by Industry Sector

-Goods-producing:   -6,000

• Natural resources/mining    4,000
• Construction     3,000
• Manufacturing     -13,000

-Service-providing:     190,000

• Trade/transportation/utilities     56,000
• Information     18,000
• Financial activities     13,000
• Professional/business services     14,000
• Education/health services     20,000
• Leisure/hospitality     54,000
• Other services     15,000

Change by U.S. Regions

-Northeast:     22,000

• New England     5,000
• Middle Atlantic   17,000

-Midwest:     64,000

• East North Central     61,000
• West North Central     3,000

-South:     50,000

• South Atlantic     59,000
• East South Central     10,000
• West South Central     -19,000

-West:     70,000

• Mountain     16,000
• Pacific     54,000

Change by Establishment Size

-Small establishments:     39,000

• 1-19 employees     23,000
• 20-49 employees     16,000

-Medium establishments:     92,000

• 50-249 employees     53,000
• 250-499 employees     39,000

-Large establishments:     69,000

• 500+ employees     69,000

Pay Insights
Pay gains were stable in January

Year-over-year pay growth for job-stayers was 4.7 percent. Pay growth for job-changers was 6.8 percent. Beginning this month, Pay Insights incorporates a larger sample size.

Median Change in Annual Pay (ADP matched person sample)

-Job-Stayers     4.7%

-Job-Changers     6.8%

Median Change in Annual Pay for Job-Stayers by Industry Sector

-Goods-producing:                                                      

• Natural resources/mining     4.3%
• Construction     5.0%
• Manufacturing     4.9%

-Service-providing:                                              

• Trade/transportation/utilities     4.3%
• Information     4.3%
• Financial activities     5.0%
• Professional/business services     4.6%
• Education/health services     5.0%
• Leisure/hospitality     4.8%
• Other services     4.6%

Median Change in Annual Pay for Job-Stayers by Firm Size

-Small firms:                                                                

• 1-19 employees     2.9%
• 20-49 employees     4.5%

-Medium firms:                                                            

• 50-249 employees     5.0%
• 250-499 employees     5.1%

-Large firms:                                                                

• 500+ employees     5.0%

Pay gains were stable in January
Year-over-year pay growth for job-stayers was 4.7 percent. Pay growth for job-changers was 6.8 percent. Beginning this month, Pay Insights incorporates a larger sample size.

Median Change in Annual Pay (ADP matched person sample)

• Job-Stayers     4.7%
• Job-Changers     6.8%

Median Change in Annual Pay for Job-Stayers by Industry Sector

• Goods-producing:         
       - Natural resources/mining     4.3%
       - Construction     5.0%
       - Manufacturing     4.9%

• Service-providing:                             
       - Trade/transportation/utilities     4.3%
       - Information     4.3%
       - Financial activities     5.0%
       - Professional/business services     4.6%
       - Education/health services     5.0%
       - Leisure/hospitality     4.8%
       - Other services     4.6%

Median Change in Annual Pay for Job-Stayers by Firm Size

• Small firms:           
       - 1-19 employees     2.9%
       - 20-49 employees     4.5%

• Medium firms:   
       - 50-249 employees     5.0%
       - 250-499 employees     5.1%

• Large firms:
       - 500+ employees     5.0%

To see Pay Insights by U.S. State, Gender, and Age for Job-Stayers, visit here:

* Sum of components may not equal total due to rounding.

The December total number of jobs added was revised from 122,000 to 176,000. The historical data file and weekly data for the previous month are available at https://adpemploymentreport.com/.

The January 2025 report reflects the scheduled annual revision of the ADP National Employment Report. The data series has been reweighted to match annual Quarterly Census of Employment and Wages (QCEW) benchmark data through March 2024. In addition, this revision encompasses an improved labeling model, including updated geographical and industry classifications.

The 2025 mid-year preliminary benchmark will be moved from August to September.

To subscribe to monthly email alerts or obtain additional information about the ADP National Employment Report, including employment and pay data, interactive charts, methodology, and a calendar of release dates, please visit https://adpemploymentreport.com/.    

The February 2025 ADP National Employment Report will be released at 8:15 a.m. ET on March 5, 2025.

ADP Pay Insights Methodology Enhancements
ADP Pay Insights uses employer payroll data to track the wages and salaries of individual workers and computes year-over-year changes in pay. Beginning in January 2025, the Pay Insights base data set will include nearly 22.3 million workers, up from about 14 million.

This expanded sample size is the result of improved industry code matching and an enhanced imputational model.

From this larger sample, Pay Insights can make more than 14.8 million pay-change observations each month, up from nearly 10 million when it launched. Included in this sample are job-stayers and job-changers.

The monthly sample of job-stayers – those unique worker-employer pairings observed in both the current month and the 12 months earlier – has grown from more than 7.7 million to more than 13.8 million.

The sample of job-changers – those individuals whose current job is different than the one they held 12 months earlier – has grown from approximately 310,000 to more than 1 million.

With this change, the Pay Insights time series also has expanded to begin in December 2018, from October 2019. Because the methodology requires two years of observation to compute pay growth, the series will be reported from November 2020.

About the ADP® National Employment Report^™

The ADP National Employment Report is an independent measure of the change in U.S. private employment and pay derived from actual, anonymized payroll data of client companies served by ADP, a leading provider of human capital management solutions. The report is produced by ADP Research in collaboration with the Stanford Digital Economy Lab.

The ADP National Employment Report is broadly distributed to the public each month, free of charge, as part of the company's commitment to offering deeper insights of the U.S. labor market and providing businesses and governments with a source of credible and valuable information.

About the ADP Research
The mission of ADP Research is to make the future of work more productive through data-driven discovery. Companies, workers, and policymakers rely on our finely tuned data and unique perspective to make informed decisions that impact workplaces around the world.

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