Firms gain 175,000 jobs in Jan.: ADP

Businesses added 175,000 jobs in January, private payroll processor ADP said Wednesday, signaling that the labor market may have bounced back after slumping in December.

Economists expected ADP to report about 185,000 additional private-sector jobs, according to a consensus forecast. That's roughly in line with estimates for the Labor Department's more closely watched survey, due Friday, of job gains by businesses and federal, state and local governments.

ADP said that in January, small businesses added 75,000 jobs, mid-size ones, 66,000 and large companies, 34,000. .

Professional and business services led job gains, with 49,000. Trade, transportation and utilities added 30,000 jobs and construction firms, 25,000. Manufacturers cut 12,000 jobs.

Mark Zandi, chief economist of Moody's Analytics, which helps ADP compile the report, said weather dampened job growth in December for the second straight month.

"Cold and stormy winter weather continued to weigh on the job numbers," he said. "Underlying job growth, abstracting from the weather,remains sturdy."

Both the ADP and Labor reports reflect similar trends but ADP has had mixed success in forecasting Labor's tally which comes two days later. In December, ADP's survey showed 238,000 private-sector job gains, while Labor reported 87,000 and 74,000 overall, including 13,000 government job losses. That marked a sharp dropoff from average monthly gains of more than 200,000 since August.

For all of 2013, ADP totals have differed from Labor's initially reported estimates by an average 50,000 a month, according to a UBS analysis. ADP says its numbers are a predictor of Labor's final revised numbers.

Economist Jim O'Sullivan of High Frequency Economics says the slowdown in payroll gains reported by Labor in December was largely due to severe weather that temporarily kept workers at home. Weather, he says, typically has less of an impact on the ADP survey.

Reports this week on manufacturing activity and auto sal! es in January were weak, defying widespread projections for a pickup in economic growth this year, though economists say unusually cold weather again was the main culprit. The disappointing data added to a recent stock market sell-off triggered by financial turmoil in emerging markets.