Private employers in the US added far fewer jobs than expected in January, bolstering the case for a slower pace of rate hikes from the Fed. Or at least that was the narrative markets were likely to favor.

US firms added just 106,000 jobs last month, ADP said Wednesday. The range of estimates from nearly three-dozen economists was 120,000 to 210,000. So, the actual print came in well below the lowest guess.

Ostensibly, that suggested the most tepid pace of private sector hiring in two years, but ADP blamed the weather — specifically, floods and ice storms. “In January, we saw the impact of weather-related disruptions on employment during our reference week,” chief economist Nela Richardson remarked.

“Hiring was stronger during other weeks of the month, in line with the strength we saw late last year,” Richardson added.

I’m certainly not in a position to question ADP’s interpretation of their own data, but I would note that at least some of the 32 economists who ventured an estimate for this month’s release were surely aware of the weather effect. Given that, it’s fair to call the number weak. December’s headline was revised higher by 18,000.

The January release was accompanied by revisions which, frankly, made comparisons next to impossible. The chart above looks nothing like it did last month, save the preservation of the uninterrupted streak of monthly gains notched during 2021 and 2022. Between the historical revisions and the weather caveat, it was very difficult to know what to make of the numbers.

Large companies (500 or more employees) apparently hired a net 128,000 people in January. That, despite pervasive reports of layoffs and planned headcount reductions at major US corporates. Small firms, by contrast, shed 75,000 workers.

In goods, a 23,000 gain in manufacturing payrolls offset a 24,000 reduction in construction jobs, according to the figures. On the services side, leisure and hospitality hiring was 95,000 in January.

Meanwhile, ADP’s new “Pay Insights” suggested pay growth for job stayers in January was 7.3% (YoY, obviously). That was unchanged from December, and when taken in conjunction with an uptick for job switchers (to 15.4%), the incentive for quitting appeared to increase, if only at the margins.

The median pay change in leisure and hospitality remained in the double-digits at 10.1%, unchanged from the prior month.

The data came on the heels of a cooler-than-anticipated read on the closely-watched Employment Cost Index and ahead of government figures on job openings and, of course, payrolls on Friday.

I’m not inclined to read too much into the ADP report. It’s hard to parse, and during a week with so many top-tier macro- and micro- fundamental inputs, it didn’t feel especially relevant. That said, in the “bad news is good news” regime, markets will be inclined to trade any incremental evidence of a labor market slowdown as a positive development.