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Private payrolls drop 123,000 in December: ADP

Private payrolls drop 123,000 in December: ADP
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The economy shed private sector jobs for the first time since April, the latest sign of a softening economic recovery.

Private payrolls fell by 123,000 in December, according to a monthly jobs report by ADP. Official Labor Department jobs data, which can vary significantly from the ADP report, is due out on Friday and is expected to show an uptick in the historically high unemployment rate.

The decrease in jobs comes as the country deals with its most severe COVID-19 surge, setting daily records for new cases, hospitalizations and deaths in December, a trend that has not abated in the new year.

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“As the impact of the pandemic on the labor market intensifies, December posted the first decline since April 2020,” said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute.

The job losses, he noted, were largely concentrated in retail, leisure and hospitality, market segments that are particularly vulnerable to the effects of widespread COVID-19 cases. Increased infection rates lead to more people staying home and the possibility of more strict lockdown measures from state and local governments.

Jobs in trade, transportation and utilities also saw a significant decline.