The U.S. labor market opened 2026 on a notably weak footing, with private-sector hiring barely registering in January and reinforcing signs that the economy has settled into a prolonged slowdown rather than a sharp downturn.

New data from payroll processor ADP show that employers added just 22,000 jobs during the month, a figure that fell short of already muted expectations and underscored how narrow the sources of job growth have become.

The January gain was lower than December’s downwardly revised 37,000 increase and well below the Dow Jones forecast of 45,000. The headline number also masks a deeper fragility in the job market. Without a surge of 74,000 hires in education and health services, private employment would have declined outright. That concentration highlights the extent to which hiring momentum is no longer broad-based, but instead relies heavily on one structurally resilient sector.

Health care and education have been the primary engines of U.S. job growth for more than a year, driven by demographic pressures, persistent staffing shortages, and steady demand that is relatively insulated from interest-rate cycles. January’s data show that this dynamic has not changed. By contrast, most other sectors either grew marginally or contracted, suggesting that businesses remain cautious about expanding payrolls amid uncertainty around demand, borrowing costs, and global trade conditions.

Outside health-related roles, the gains were modest. Financial activities added 14,000 jobs, pointing to selective hiring in areas such as insurance, real estate, and financial services, even as parts of the sector face pressure from volatile markets. Construction employment rose by 9,000, likely reflecting ongoing infrastructure projects and pockets of resilience in non-residential building, despite higher financing costs. Trade, transportation, and utilities, along with leisure and hospitality, each added just 4,000 jobs, a subdued showing for sectors that typically benefit from consumer strength.

Losses, however, were more pronounced. Professional and business services shed 57,000 jobs, the steepest decline among all categories. That sector, which includes consulting, legal services, and corporate support functions, is often seen as a bellwether for white-collar confidence. The drop suggests companies are trimming discretionary spending and delaying expansion plans.

Manufacturing employment fell by 8,000, extending a period of weakness tied to soft global demand, elevated borrowing costs, and lingering effects of supply chain realignments. The “other services” category, which includes personal and repair services, lost 13,000 jobs, adding to evidence that parts of the consumer-facing economy are under strain.

In net terms, virtually all job creation came from the services sector, and even there it was narrowly concentrated. Goods-producing industries continued to lag, reinforcing concerns that the U.S. economy lacks the breadth of growth typically associated with a healthy labor market.

Company size data adds another layer to the picture. Mid-sized firms, employing between 50 and 499 workers, accounted for all of January’s net job gains. Small businesses were flat, while large employers cut 18,000 positions. This pattern suggests that big companies, which tend to be more exposed to capital markets, global trade, and shareholder pressure, are actively managing costs and headcount. Small firms, often more sensitive to financing conditions, appear reluctant to hire, likely reflecting tighter credit and uncertain demand. The totals do not add up precisely because of rounding, ADP noted.

Wage growth offered little new comfort as pay for workers who stayed in their jobs rose 4.5%, unchanged from December. While that pace is well below the peaks seen in the immediate post-pandemic period, it remains above levels typically associated with the Federal Reserve’s inflation target. For policymakers, this combination of weak hiring and still-firm wage growth complicates the outlook: the labor market is cooling, but not in a way that clearly alleviates underlying price pressures.

The January ADP report continues a trend that defined much of 2025: a low-hire, low-fire environment. Employers appear unwilling to expand aggressively, yet layoffs remain relatively contained. This stasis suggests companies are waiting for clearer signals on the economic trajectory, including the direction of interest rates, fiscal policy, and global growth.

ADP’s data usually precedes the more closely watched nonfarm payrolls report from the Bureau of Labor Statistics, which provides a fuller picture of employment, wages, and participation. That release, normally due Friday, has again been delayed by a partial U.S. government shutdown, leaving markets and policymakers without a timely official snapshot of the labor market.

Overall, the latest figures point to an economy entering 2026 with limited momentum. Hiring is narrow, confidence among employers appears subdued, and job growth depends heavily on health care and education. With manufacturing and professional services under pressure and wage growth still elevated, the labor market offers little clarity for policymakers debating whether current conditions warrant patience or a shift toward additional support.

Ben Horowitz is unconvinced by the growing chorus of warnings that artificial intelligence is on the verge of wiping out jobs at scale. Instead, the Andreessen Horowitz cofounder argues that the most confident predictions about AI-driven mass unemployment rest on a shaky assumption: that the future of work can be forecast with any real certainty.

Speaking on Tuesday on the Invest Like The Best podcast, Horowitz said the debate around AI and employment has become overly deterministic, with too many commentators treating job losses as an inevitable and linear outcome of technological progress.

“I think people are acting as though it’s very predictable when it’s not at all predictable,” Horowitz said. “Why are you so sure it’s going to happen next? And why are you so sure no jobs are going to be created? I don’t think it’s nearly as predictable as people are saying.”

His comments land at a moment when anxiety over AI’s economic impact is intensifying, even as adoption accelerates across industries. Governments are weighing regulation, companies are racing to integrate generative AI into workflows, and workers are trying to understand whether the technology represents an opportunity or an existential threat.

The debate has sharply divided the tech world. Some of the field’s most prominent voices have issued stark warnings. Geoffrey Hinton, often described as the “Godfather of AI,” has repeatedly cautioned that advanced AI systems could displace large numbers of workers. Similar concerns have been raised by UC Berkeley professor Stuart Russell, University of Louisville computer scientist Roman Yampolskiy, and Anthropic chief executive Dario Amodei, who has said AI could eliminate a significant share of white-collar jobs.

On the other side are executives who see AI less as a job killer and more as a force for reconfiguration. OpenAI chief executive Sam Altman and Nvidia boss Jensen Huang have both argued that while AI will disrupt existing roles, it is more likely to reshape work and create new categories of employment rather than erase work altogether.

Horowitz aligns more closely with the latter camp, but his argument goes beyond optimism about new roles. He frames AI as the latest phase in a much longer historical process, one in which automation has repeatedly transformed economies in ways that were impossible to foresee in advance.

To make his point, Horowitz drew on the most dramatic example of all: agriculture. In the early years of the US economy, he noted, farming accounted for roughly 95% of jobs. Today, those roles have almost entirely disappeared, replaced by work that would have been unrecognizable to earlier generations.

“We’ve been automating things since the agricultural days,” Horowitz said. “Almost all those jobs have been eliminated. And the jobs we have now, the people doing agriculture wouldn’t even consider jobs.”

For Horowitz, that history undercuts the confidence of today’s AI doomsayers. The error, he argues, is assuming that current job categories offer a reliable map of the future. Each major technological shift, from industrial machinery to computers and the internet, destroyed large numbers of existing roles while giving rise to entirely new forms of work that were difficult to imagine beforehand.

“The idea that we could imagine all the jobs that are going to come, sitting here now, that AI is going to enable, I think is low,” he said.

He also questioned the sense of urgency that often accompanies predictions of imminent mass displacement. Modern AI, he argued, did not appear overnight. Many of its core technologies have been under development for more than a decade.

Image recognition breakthroughs date back to around 2012, while advances in natural language processing gathered pace by 2015. Even ChatGPT, which ignited the current wave of public interest, was launched in 2022. Yet, Horowitz asked, where is the wave of job destruction that was supposed to follow?

“We’ve had AI going right — ImageNet was what, 2012 and then natural language stuff was like 2015, and then ChatGPT was 2022,” he said. “Where’s all the job destruction? Why hasn’t it happened yet?”

That skepticism does not mean Horowitz believes AI will leave the labor market untouched. He acknowledged that certain roles are likely to come under pressure, particularly jobs focused on processing or relaying information for others, tasks that AI systems are increasingly capable of performing faster and cheaper.

But he expects those losses to be offset by growing demand in other areas, especially work that leans on creativity, judgment, and the ability to define problems rather than simply execute them.

“I don’t really think that the door is going to close behind you,” Horowitz said. “I think the opportunities tend to multiply when you open up a new way of doing things.”

His view reflects a broader strand of thinking within Silicon Valley that sees AI less as an endpoint and more as a general-purpose tool, one that will alter how work is done rather than eliminate the need for people altogether. Still, the gap between that outlook and the more pessimistic warnings from parts of the AI research community underscores how unsettled the conversation remains.

Horowitz’s message is one of caution against certainty. History, he suggests, offers plenty of evidence that technology disrupts labor markets in messy, uneven, and often surprising ways. What it does not offer is a clear script for how AI’s story will unfold.