Hey, I thought the vaccine mandates and masks were supposed to stop COVID and its mutations in its tracks!
Instead, Omicron has taken a much bigger bite out of the labor market than expected, data from payroll processing firm ADP indicated Wednesday.
The number of workers on private payrolls fell by 301,000 in January, falling far short of expectations for growth of 225,000 jobs.
This was the first decline in payrolls reported by ADP since 2020.
The leisure and hospitality sector shed 154,000 jobs. Trade, transportation, and utilities dropped 62,000 workers. Other services saw payrolls decline by 23,000. Health and education jobs fell by 15,000. Information technology jobs fell by 8,000 and financial services sank by 9,000.
Manufacturers cut 21,000 positions. Construction declined by 10,000. Mining and natural resources added 4,000.
All told, the services sector’s payrolls fell by 274,000 and the goods-producing sector’s payrolls dropped by 27,000.
The Department of Labor will report the official count for January jobs on Friday. It is expected to show that jobs grew by around 170,000 but that may be an underestimate of the impact of omicron.
Since Omicron can be readily blamed for ADP report, it doesn’t look like it has affected the implied probability of 5 rate hikes over the next year.
Unless, of course, Jay and The Gang are hustling us.