Businesses are off to a strong start in 2025, adding thousands of new jobs as private-sector hiring surged in January. According to the latest ADP National Employment Report, businesses added 183,000 jobs last month, with small businesses playing a key role in the hiring push. The report, produced in collaboration with the Stanford Digital Economy Lab, highlights steady job growth, particularly in consumer-driven industries.
Small businesses, those with fewer than 50 employees, added 39,000 jobs, reinforcing their resilience in a competitive labor market. Medium-sized businesses, which employ between 50 and 499 workers, led hiring with 92,000 new positions, while large companies contributed 69,000 jobs.
The service sector accounted for nearly all of the employment gains, adding 190,000 positions. Trade, transportation, and utilities led the way with 56,000 new jobs, followed by 54,000 in leisure and hospitality—industries where small businesses are heavily represented. Other areas with notable growth included education and health services, financial activities, and professional and business services.
Not all industries saw the same growth. The goods-producing sector shed 6,000 jobs, with manufacturing experiencing the largest decline, losing 13,000 positions. However, small gains in natural resources, mining, and construction helped offset some of the losses.
Regional hiring trends varied, with the West leading all areas by adding 70,000 jobs, followed by the Midwest with 64,000. The South added 50,000 positions, while the Northeast had the smallest increase at 22,000.
Wage growth remained steady, with job-stayers seeing a 4.7% median annual pay increase, while job-changers saw a 6.8% rise. Smaller companies saw more modest pay bumps compared to their larger counterparts, but steady hiring suggests continued confidence among small business owners.
“We had a strong start to 2025, but it masked a dichotomy in the labor market,” said ADP Chief Economist Nela Richardson. “Consumer-facing industries drove hiring, while job growth was weaker in business services and production.”
As businesses continue to hire, the report signals a promising outlook for entrepreneurs looking to expand their teams and build momentum in the months ahead.