US companies accelerated hiring in January, according to the ADP Employment Report. Private payrolls increased 183,000, marking a faster pace for a second straight month. “Hiring momentum in the last quarter of 2024 carried into January with some exceptions, including manufacturing,” notes Nela Richardson, ADP’s chief economist. “We had a strong start to 2025 but it masked a dichotomy in the labor market. Consumer-facing industries drove hiring, while job growth was weaker in business services and production.”
The US trade deficit deepened in December, hitting a record $1.2 trillion for 2024. Key factors driving the trend: as American consumers increased purchases of imported products while a strong US dollar slowed export growth.Two Fed officials highlight inflation risk related to Trump’s plans for tariffs. “If we see inflation rising or progress stalling in 2025, the Fed will be in the difficult position of trying to figure out if the inflation is coming from overheating or if it’s coming from tariffs,” says Chicago Fed President Austan Goolsbee. “That distinction will be critical for deciding when or even if the Fed should act.” Meanwhile, Boston Fed President Susan Collins says: “We have limited experience of such large and very broad-based tariffs. There are many different dimensions, and there are second-round effects as well, which make it particularly hard to really assess what the amounts would be … We don’t know what the time frame would be that would cause a rise in a price level.”US services sector growth slowed in January, based on the ISM Services Index, a survey-based benchmark. The index slipped to 52.8 last month from a revised 54.0 in December. The current level remains moderately above the neutral 50 mark that separates growth from contraction.The US Composite PMI, a survey-based GDP proxy, eased in January, reflecting slower growth. Last month’s reading marks a downshift following an acceleration in December, but January is t still signaling a solid monthly rise in business activity,” reports S&P Global.More By This Author:Risk-On Sentiment Endures, Despite Trade UncertaintyMacro Briefing – Wednesday, Feb. 5Treasury Yields Edge Lower Despite Threat Of Trade War