ADP: Economy Added 170,000 Jobs In January

Small businesses drove most of the growth, adding 95,000 jobs, mostly in the service sector, payroll giant ADP said today.

Overall, the economy added 170,000 jobs in the private sector, a smaller increase than the increase in December (which was revised downward to 292,000) but fairly well in line with the job gains over the past six months or so.

The slowdown may be explained by the “purge effect,” which we mentioned last month—basically, it’s an accounting glitch that may explain why the December numbers were so (artificially) high.

The official Labor Department report, due Friday, is expected to show a 145,000 gain and an unemployment rate of 8.5 percent.