U.S. businesses added 183,000 jobs in January, payroll processor ADP reported Wednesday, signaling that the labor market remains resilient even as hiring moderates.
The increase exceeded expectations. Economists surveyed by Econoday had forecast a gain of 153,000 jobs.
“We had a strong start to 2025, but it masked a dichotomy in the labor market,” said Nela Richardson, chief economist at ADP. “Consumer-facing industries drove hiring, while job growth was weaker in business services and production.”
The report suggests service-sector jobs remain a key driver of employment growth, with gains concentrated in areas such as health care and hospitality. Meanwhile, manufacturing continued to show signs of stagnation, shedding 13,000 jobs, reflecting the ongoing slump that plagued the factory sector for the final two years of the Biden administration.
There was solid job growth in both construction and mining, which includes oil and natural gas extraction. Construction employment growth has been surprisingly robust given the slump in residential home building due to higher interest rates. On Tuesday, the Department of Labor’s Job Openings and Labor Turnover Survey—known as JOLTS—suggested a slowdown in demand for construction workers.
It’s uncertain whether the services sector, which employs most Americans, will continue to be an engine for job growth. Reports from the Institute for Supply Management and S&P Global indicated a slowdown in the sector’s growth in January.
Though ADP’s figures don’t always align with the Labor Department’s official jobs report, due out Friday, the two are likely to move in the same direction over time. The government’s report is expected to show a 158,000 increase in payrolls for January, according to economists polled by Econoday. December’s employment gain was 256,000, though that figure will be subject to revisions.
The January report also presents seasonal challenges, as post-holiday layoffs can distort the data. Still, the broader trend suggests that while hiring has cooled from last year’s pace, job growth remains strong enough to keep unemployment near 4 percent.
This past month’s data was also likely impacted by the devastating wildfires around Los Angeles, which burned many businesses and caused significant economic disruption. Hiring for the rebuild in the months ahead could also impact jobs numbers going forward. Severe cold in much of the country may also have been a drag on hiring.
ADP also revised its December jobs figure upward to 176,000 from an initial estimate of 122,000, reinforcing the view that hiring remains stable despite higher interest rates and economic uncertainty.
Consumer-facing businesses such as restaurants and health-care providers are still expanding payrolls, while manufacturers and goods-producing industries have largely stalled. That divide could shape expectations for Federal Reserve policy as officials weigh how labor-market trends impact inflation and economic growth.
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