Feb. 2 (UPI) — The U.S. economy lost more than 300,000 nonfarm private jobs in January, the first time the economy has lost jobs in more than a year, according to the ADP and Moody’s Analytics monthly report released Wednesday.
ADP chief economist Nela Richardson attributed the drop to the COVID-19 Omicron variant, calling the setback “significant, though likely temporary.”
The service-providing sector sustained the biggest losses in January, contracting 274,000 jobs. Within that sector, leisure/hospitality absorbed 154,000 of the losses, according to the report. Trade/transportation/utilities lost 62,000 as well.
The loss of 301,000 jobs was spread across all size sectors, but small businesses took the biggest hit, shedding 144,000, The smallest companies, those with less than 20 employees, eliminated 106,000 jobs.
“Leisure and hospitality saw the largest setback after substantial gains in fourth-quarter 2021, while small businesses were hit hardest by losses, erasing most of the job gains made in December 2021,” Richardson said in a statement.
Large companies, those with 500 or more employees, lost 98,000 jobs while medium businesses, with between 50 to 499 workers, lost 59,000 jobs, according to the report.
“The labor market recovery took a step back at the start of 2022 due to the effect of the Omicron variant and its significant, though likely temporary, impact on job growth,” Richardson said. “The majority of industry sectors experienced job loss, marking the most recent decline since December 2020.”