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The numbers: Businesses created just 107,000 new jobs in January, paycheck company ADP said, in another sign that hiring has slowed since last fall.
Economists polled by the Wall Street Journal had forecast a gain of 150,000.
The ADP payroll estimate is not an accurate predictor of the government’s official employment report that follows a few days later, but both surveys move in the same direction over time.
Both reports show that businesses are still adding workers, but at a notably slower pace compared to the start of 2023.
The government on Friday is expected to report that 185,000 new jobs were created in January, including government workers. ADP only tracks the private sector.
Big picture: The economy never slowed down as much as predicted. Higher interest rates have failed to depress the economy.
The rate of inflation is slowing, however, and that could spur the Federal Reserve to cut interest rates by the early summer.
One wildcard, though, are wages. Does wage growth continue to taper off — or reaccelerate if the economy speeds up. The answer will determine how much, and how quickly, the Fed cuts rates.
Market reaction: The Dow Jones Industrial Average DJIA, +0.35% and S&P 500 SPX, -0.06% were set to open lower in Wednesday trading.