Private companies in the United States shed 123,000 jobs in December, indicating the disruption to the labor market recovery by recent COVID-19 spikes, payroll data company Automatic Data Processing (ADP) reported Wednesday.
The figure, well below the forecast of a 60,000 gain by economists surveyed by Dow Jones, marks the first drop since April, reversing the trend of consecutive growth over the past seven months.
The employment decline was mainly in the service-providing sectors, which cut 105,000 jobs in the month, according to the report, which was produced by the ADP Research Institute in collaboration with Moody's Analytics.
Ahu Yildirmaz, vice president and co-head of the ADP Research Institute, noted that the job losses were primarily concentrated in retail and leisure and hospitality.
Large firms and small businesses laid off 147,000 workers and 13,000 workers respectively, while medium-sized companies added 37,000 employees, the report showed.
Private companies in the United States slashed a revised 302,000 jobs in March amid COVID-19 shutdowns, the first private payroll contraction in a decade. In April, the private sector cut nearly 20 million jobs.
Amid reopening efforts, the private sector saw a revised job gain of 3.3 million in May, followed by a revised growth of 4.5 million in June. In recent months, however, job growth has been slowing down.
In November, the private sector added a downwardly revised 304,000 jobs.
The data for the ADP report is collected for pay periods that can be interpolated to include the week of the 12th of each month, and processed with statistical methodologies similar to those used by the U.S. Department of Labor's Bureau of Labor Statistics (BLS), according to the report.
The ADP report came two days before the crucial monthly employment report released by the BLS, which will include employment data from both the private sector and the government.
