Omicron Surge Took Away 301,000 Jobs, ADP Data Shows

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The omicron variant of COVID-19 dealt a clear setback to the labor market in January as the private sector lost 301,000 jobs—more than in any month since April 2020, when the pandemic first crushed the economy.

The figures from ADP Research Institute were far worse than economists expected. Consensus forecasts predicted the market would gain 250,000 jobs rather than losing them. Still, economists expect the resurgence of COVID-19 to be just a temporary interruption to what had been a steady recovery in the job market since last December.

More than half the jobs lost were in the leisure and hospitality sector, the field most sensitive to pandemic disruptions.

While the ADP report is considered by some economists to be less reliable than the more widely watched government jobs report, which comes out Friday, the data does suggest that omicron took a heavy toll on employment, especially in restaurants, said Michael Gregory, deputy chief economist at BMO Capital Markets. Economists expect the government report to show a lackluster 175,000-job pickup, but Gregory said he wouldn’t be surprised if that figure were closer to zero in light of the dismal ADP numbers. Grant Thornton. “Employment Poised to Stall in January.” Accessed Feb. 2, 2022.

Although public spaces are not subject to any official restrictions, the virus itself still influenced consumers’ decisions and impacted businesses, Gregory said.

“People weren’t going out to eat as much, and because of that, people lost jobs or there wasn’t as much hiring as would have taken place otherwise,” he said.

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  1. ADP Research Institute. "ADP National Employment Report: Private Sector Employment Decreased by 301,000 Jobs in January."

  2. Grant Thornton. “Employment Poised to Stall in January.”

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