Private sector employment decreased by 301,000 jobs in December — largely due to the effects of the omicron variant — indicating a significant drop following November’s 807,000 jobs addition, according to the ADP National Employment Report released Feb. 2.

                By                    Yaёl Bizouati-Kennedy

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“The labor market recovery took a step back at the start of 2022 due to the effect of the omicron variant and its significant, though likely temporary, impact to job growth,” Nela Richardson, chief economist for ADP, said in a statement. “The majority of industry sectors experienced job loss, marking the most recent decline since December 2020. Leisure and hospitality saw the largest setback after substantial gains in fourth quarter 2021, while small businesses were hit hardest by losses, erasing most of the job gains made in December 2021.”

The December figure is well below the 200,000 jobs addition expected by economists surveyed by FactSet, according to Barron’s.

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In January, small companies cut the most jobs — showing a 144,000 decrease — followed by large businesses (those with 500 or more employees) shedding 98,000 jobs. Medium-sized enterprises dropped 59,000 jobs, per the ADP report.

The service-providing sector lost the most jobs (274,000) led by the leisure and hospitality business, which cut 154,000 jobs. The trade, transportation and utilities sector saw 62,000 jobs lost.

In addition, the number of Americans who quit their jobs in December topped 4.3 million, a slight decrease from November’s high of 4.5 million, according to the Labor Department’s Job Openings and Labor Turnover Survey (JOLTS) report of Feb. 1.

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On Feb. 4, the Labor Department will release the nonfarm payrolls report. Wall Street expects that report to show a gain of just 150,000 jobs, though economists and White House officials are warning the month’s numbers could be rough due to omicron — and statistical effects from the way the Labor Department compiles the data — CNBC reports.