ADP Jobs Lower, Q4 Earnings Reports Up

Wednesday, February 4th, 2026

Pre-market futures are off their lows from the very early morning, with fresh Q4 earnings reports and private-sector jobs numbers giving something of a jolt to market indexes. Interestingly, this jolt has sent the small-cap Russell 2000 up but the tech-heavy Nasdaq down. The Dow is +142 points, the S&P 500 +10, the Nasdaq -66 and the Russell +12 points.
 

Private Sector Payrolls Only Half of Estimates

Private-sector payrolls for January have been reported this morning by Automated Data Processing ADP, just like nearly every first Wednesday of a month. These came in roughly half of expectations to +22K, down from a downwardly revised +37K the previous month. That said, this represents the first back-to-back monthly job gains in the private sector since April and May of last year.

Services employment carried almost all of the private-sector hires last month, +21K to +1K for Goods-producing. Once again, most hires were conducted in the Healthcare Services space, +74K, followed by +14K in Financial Services and +9K in Construction. Professional & Business Services shed an eye-opening -57K private-sector jobs in the month, and Manufacturing has not seen a month of positive ADP job growth since the early months of 2024.

Interviewed this morning on CNBC’s “Squawk Box,” ADP Chief Economist Nela Richardson put it succinctly: “Hiring has been following the consumer, not technology…” Thus, while we’ve seen the AI trade ignite the stock market over the past couple years (“risk-off” periods like the one we’ve just undergone notwithstanding), this is not translating to the private-sector jobs market as of yet.

It’s possible the Construction sector job gains cited in this morning’s ADP report are a signal that data-center buildouts are adding to the labor force, but it feels a bit early to stick a flag in that. Longer-term, the fear is that AI technology will actually replace employees across a wide array of industries — but we’re a ways off from that narrative, as well.

Finally, a realignment benchmark for ADP has been released as part of this morning’s private-sector employment news. This new methodology, called a “true-up” by Dr Richardson, shows -212K fewer hires in the private sector for all of 2025. Thus, we went from +771K total private-sector hires in 2024 to +398K in 2025. If we’re looking for simple numbers with which to assess our current labor environment, this one might fit the bill — even if it’s a tough pill to swallow.

The partial government shutdown is now putting a delay on Friday’s non-farm payroll report from the U.S. Bureau of Labor Statistics (BLS). Expectations are for job gains of +60K; the Unemployment Rate last time around came in at a welcome, cooler +4.4%.
 

Q4 Earnings Reports Ahead of the Open

We see a cadre of Big Pharma companies putting out Q4 earnings this morning, most with positive results. Best of these is arguably Eli Lilly & Co. LLY, which posted a +7.9% earnings surprise to $7.54 per share, on revenues of $19.29 billion which also surprised estimates by +7.9%. Strength in its diabetes/weight loss drugs Zepbound and Mounjaro also signaled positive growth going forward. For more on LLY’s earnings, click here.

Other pharma companies reporting this morning are AbbVie ABBV and Novartis NVS, both of which brought a Zacks Rank #3 (Hold) rating to today’s earnings reports. AbbVie posted earnings of $2.71 per share versus estimates of $2.66, while Novartis booked $2.03 per share in the quarter, beating the Zacks consensus by 4 cents. However, while NVS shares are up +1.6% on the news, ABBV is down -3%.

Continuing the good fortunes in the oil refining space, Phillips 66 PSX clobbered earnings estimates this morning: $2.47 per share versus $2.11 expected, and in another stratosphere from the -$0.15 per share reported in the year-ago quarter. Shares are up +1.3% at this hour of pre-market trading.

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