Personal sector corporations added 122,000 jobs in December, fewer than anticipated, ADP says
A worker adjusts hiring signage at a job and resource fair hosted by the Mountain Area Workforce Development Board in partnership with NCWorks in Hendersonville, North Carolina, U.S., on Tuesday, Nov. 19, 2024.
Allison Joyce | Bloomberg | Getty Images
Private sector job creation fell more than expected in December, while wages rose at the slowest pace in nearly three and a half years, payments processing firm ADP reported on Wednesday.
Companies added a seasonally adjusted 122,000 jobs this month, down from 146,000 additions in November and below the Dow Jones consensus forecast of 136,000. It was the smallest increase since August.
On the wage front, wages rose 4.6% year-on-year, the slowest pace since July 2021.
“The labor market slowed to a more moderate pace of growth in the final month of 2024, with a slowdown in both hiring and wage increases,” said ADP chief economist Nela Richardson.
Although there are signs that hiring is slowing, there is little evidence that layoffs are increasing.
The Labor Department reported Wednesday that initial unemployment insurance claims totaled just 201,000 in the week ending Jan. 4. That was well below the estimate of 215,000 and the lowest level since February 2024.
The reports come two days before the Bureau of Labor Statistics' closely watched count of nonfarm payrolls. Economists polled by Dow Jones expect this report to show a gain of 155,000, which in itself would be a significant decline from November's stronger-than-expected 227,000. The ADP and BLS numbers often differ, sometimes by large variations.
Federal Reserve policymakers are closely watching labor market numbers as they plan their next steps in monetary policy. While most Fed officials have said they believe the labor market is solid, they want to keep interest rates less restrictive so as not to jeopardize job creation.
They also expressed more confidence that inflation has stabilized, although it is still above the Fed's 2 percent target. The ADP figures could be evidence that wages are not putting pressure on inflation.
From a sector perspective, job creation was strongest in the education and health services category, where 57,000 jobs were created. Other significant increases occurred in construction (27,000), leisure and hospitality (22,000) and finance (12,000).
Several sectors reported job losses, including manufacturing (-11,000), natural resources and mining (-6,000), and professional and business services (-5,000).
Almost all jobs came from large companies with more than 500 employees, i.e. 97,000.
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