Witness the destruction of businesses with 20-49 employees.
Please consider the ADP® National Employment Report for January 2026.
Private employers added 22,000 jobs in January.
Job creation took a step back in 2025, with private employers adding 398,000 jobs, down from 771,000 in 2024. While we’ve seen a continuous and dramatic slowdown in job creation for the past three years, wage growth has remained stable.
Month-Over-Month Change by Employer Size
- 1-19: +30,000
- 20-49: -30,000
- 50-249: +37,000
- 250-499: +4,000
- 500+: -18,000
Year-Over-Year Change by Employer Size
Year-Over-Year Change Details
- 1-19: +513,000
- 20-49: -160,000
- 50-249: -252,000
- 250-499: +40,000
- 500+: +241,000
Key Weakness Points
- Businesses with 20-49 employees have negative year-over-year growth for 20 straight months and 24 out of the last 25 months.
- Businesses with 50-249 employees have negative year-over-year growth for 13 straight months.
- Businesses with 250-499 employees have gone nowhere (-26,000 to +60,000 year-over-year) for 28 straight months. The average is +13,000 year-over-year, about 1,000 a month.
This is certainly not a strong labor market.
The weakness is where one would expect, small- to mid-sized businesses clobbered by tariffs.
AI is going to start taking a bite out of large employers.
Related Posts
January 27, 2026: Trump Cheers a Plunge of the US Dollar “I Think It’s Great”
“Look at all the business we are doing,” says Trump.
January 31, 2026: Competing Claims, How Much Labor Market Weakness Is There?
Some see “No Signs of Labor Market Weakness”. Others strongly disagree.
For a look at what health care will do to the PCE price index, please see Expect a Big Divergence This Year Between CPI and PCE Inflation
Rent and Healthcare go different ways in 2026. Plus there are huge timing issues.
February 2, 2026: The Fed Has Two Huge Problems Starting Now, Acyclical Inflation and Jobs
The Fed is not in a good spot.
Regarding Tax Refunds
Reader: “800 bucks wont go far. I would think the higher the income the less likely it will go straight back into the economy. More likely invested.”
It’s possible that is the correct view. This is not a three-shotgun blast like we saw in Covid.
But I do expect a mini-blast.
None of the money went to the bottom 40% or so.
None of it went to the top 10% or so.
Will the middle class go on a buying spree?
That’s what they usually do, provided they have a job.
question. as some readers pointed out, and you did 20 years ago, inflation is money and credit inflation. the treasury sends out the refunds. the fed would need to make the new currency by computer cursor, what we used to call printing. if the people pay down debt with the new treasury refunds, does that not destroy some currency. this is a question for you, mish and your smart readers. as an aside i think the big worldwide change is central banks are letting their us tbills mature without buying much more as they are loading up their balance sheets with gold the past few years. i think when the usa stole the russians billions outright, and many nations wanting their gold back home from the fed basement in nyc and westpoint…….and we are refusing to return it for years now, the world has decided we are thieves on top of being belligerent war mongering uniparty assholes. thanks trump and biden and obama and bush and clinton crime families. and special thanks to all their voters. you are all special nihilist twats.
OK Mr. BMCC, you had a run where you actually had me agreeing with you. But you need to go drink a beer or something, “touch grass” as the kids say.
ok lady. thanks for the idiotic response. i’ll block ya. have a good life.
Repaying US debt does NOT destroy the currency created out of thin air since the interest paid is not destroyed.
correct on interest. but the principle payed certainly does. the banks have been paid to borrow money. they own the FED RESERVE OF NY. so that makes sense. i hat tip those scammers when i walk by maiden lane, quite regularly.
Small businesses are getting hammered here in SoCal. Especially in hispanic areas. On top of an already lousy business climate. Ronald Reagan did this right, we had enormous small business expansion under him. This administration could care less…
Trying to figure it all out, so I came up with these bullets.
1-19: +30,000 – Grabbing some Students, who know they must pay off their School Loans, and require some Experience perhaps? Lots of small Family Size Companies here, business start ups, some money here to be made etc. a chance to potentially grab attention early.
20-49: -30,000 – A good place for an experienced person to jump in. Let go the Students, and others, whom don’t pan out very well in the way of Work Ethic, plus Anyone hitting the Healthcare Budget too much. Not big enough to absorb that. A constant churn due to size perhaps.
50-249: +37,000 – Big enough to get attention, but will have to work. Need experience but with a big enough staff, which may be tough, they may get it done. The smaller growing companies may have issues with pay and benefits for what they may need. Sort of in between the Small & Large companies, but with enough to make it work in some cases perhaps.
250-499: +4,000 – Not Big enough to draw the career jobs, too small to bolt ahead. Can’t deal with the young, as they need workers with experience and want to work hard. Bigger numbers mean more chance of getting ahead, but how often. Tough place to be in.
500+: -18,000 – Most Anyone with 2 Legs and a heartbeat will do, as they are desperate. As a result, a lot of the least desirable end up here. A constant churn. Lots to offer potentially, if you can make it. Just need bodies.
Curious of others thoughts…
Breaking News: SCOTUS clears way for Dems to clobber Repubs during Midterms with new redistricting map.
https://www.scotusblog.com/2026/02/supreme-court-allows-california-to-use-congressional-map-benefitting-democrats/
At least they’re being consistent. Both Texas and California redistricting OK.
Agree but it won’t just be large employers. If you run a small business that produces music, videos, advertising, web content, apps, etc. for other small businesses you will no longer be needed over the long term.
I can easily see small tax firms, law firms, consulting firms go out of business because of AI. AI can’t do everything a lawyer does but it can do enough that it becomes death by a thousand cuts.
Legal Zoom LZ stock has dropped 79% over 5 years. I mentioned the story of a relative who now uses AI for most legal work for her business including responding to legal letters, setting up LLC, etc. How much work can a small firm lose before it has to shut its doors?
And as I mentioned IGV, the ETF for software companies is down 20% in six months and dropping. The talking heads on CNBC are hopeful that this is a buying opp for them but I doubt it. Sure, some firms may be too big to fail but AI will slowly eat their margins over time, they will consolidate and then we’ll be down to two big major AI providers like Google and Microsoft.
And before anyone chimes in with, “my job is safe because x, y, z” you’re thinking of what AI does today not next year or 5 years from now. This is the kind of thinking that makes you obsolete and unprepared for the future.
I’m starting to shift my portfolio for this new reality. I see large rotation into oil stocks right now and that’s where I’m at, take a look at XOP, XOM, BP, and DVN the past 3 months. The money train is leaving the station.
I did not realize the AI boom was here already, to be able to take over most of these jobs. This will definitely add a twist of not nearly as many jobs available from the start. That should make the human workers stronger, as the pool will grow for workers looking, and the best and brightest will move in first!