ADP’s latest data indicates the labor market was much weaker in 2025 than previously reported, and the slowdown is continuing into early 2026. For 2025, ADP now shows 398,000 jobs were created, a downward revision of 212,000 due to updated QCEW data. That averages just 33,000 jobs per month, and with revisions only through the second quarter so far, the final numbers could weaken further. Even at current levels, job growth was roughly half of 2024’s pace.
January’s report reinforced the soft trend, with only 22,000 jobs added versus expectations of 48,000. December was also revised lower from 41,000 to 37,000. Hiring was uneven across business sizes: small businesses added no jobs, large businesses cut 18,000 positions, and all net growth came from medium-sized firms, which added 41,000 jobs.
Overall, the data points to a labor market that weakened throughout 2025 and remains soft at the start of 2026. A weaker labor market historically points to a better interest rate market.
Source: MBSHighway.com
By: Jon Iacono