US private sector employers added far more jobs in January than expected, Wednesday’s update from ADP showed.

It’d be a mistake to dwell too long on the release given it’ll be rendered at best redundant and at worst “wrong” depending on how the BLS chips fall Friday. Remember, the government’s jobs report comes packaged this month with the BLS’s final pass at the annual benchmarking process.

Still, it’s worth spending a few minutes on ADP’s numbers. 183,000 on the headline counted as meaningful upside to consensus. Economists were looking for 150,000. The highest guess for Wednesday’s print was 165,000, so the release matched that with 18,000 to spare. And then there were the historical revisions to account for.

The ADP series was revised on Wednesday going back 15 years. The figure above shows you the “before and after,” so to speak, for the post-pandemic window.

Measuring from the pandemic lows in mid-2020, the new data suggests private employers in the US added around 900,000 more jobs than previously reported over the past four and a half years.

That said, private hiring was weaker in 2024, according to the same revisions. Specifically, Wednesday’s data showed private employers added 1.732 million jobs last year on net, fewer than the 1.822 million reflected by the unrevised series. But it was a tale of two halves.

The figure shows you the monthly breakdown. Long story short, the Fed started cutting rates aggressively just as private hiring picked up markedly.

There’s probably a chicken-egg dynamic buried in there somewhere and I won’t endeavor to unpack it, but suffice to say hiring picked up pretty much as soon as market pricing began to reflect aggressive rate cuts (i.e., in August, following weak July payrolls and amid a fleeting bout of market turmoil).

Under the hood, Wednesday’s release showed hiring was evenly distributed, even as chief economist Nela Richardson spoke of “a dichotomy.” In this context that basically just means factories shed jobs, and everybody else added them.

“We had a strong start to 2025 but it masked a dichotomy,” Richardson said. “Consumer-facing industries drove hiring, while job growth was weaker in business services and production.”

On the pay side, average annual pay growth picked up for ADP’s job “stayers” to 4.7%, and decelerated for so-called “switchers” to 6.8%. That’s what you want at the current conjuncture, given that pay growth for “switchers” is still “too” high: You want people who stay in their current positions to see pay gains that outstrip inflation, and gains for those who”churn” to decelerate.

To be sure, there should be a wage growth premium for voluntarily switching jobs, and generally speaking, there will be. Because why else would you quit? (You might quip “Because Elon Musk made me an offer I can’t refuse,” but remember this is private sector hiring we’re talking about).

What we’re after, as a community of people interested in ensuring that workers have disposable income but not so much as to create the conditions for runaway price growth, is a situation where the “reward for quitting” (i.e., the spread between pay growth for job “stayers” and “switchers”) isn’t so enticing as to create the sort of fierce competition for workers that’s conducive to wage-driven consumer price inflation.

All in all, the ADP release painted a picture of a US labor market that’s picking up momentum, and that apparently troughed midway through last year. You can draw your own conclusions as to what that might mean for the Fed.