A worker adjusts an employment sign during an employment and resource fair hosted by the Mountain Region Workforce Development Board in partnership with NCWorks, Tuesday, November 19, 2024, in Hendersonville, North Carolina, USA.
Alison Joyce | Bloomberg | Getty Images
Private-sector job creation slowed more than expected in December, payment processor ADP said on Wednesday, while wage growth was at its slowest pace in nearly three-and-a-half years.
Businesses added a seasonally adjusted 122,000 jobs in the month, down from November’s 146,000 jobs and below the Dow Jones consensus estimate of 136,000. This was the first slight increase since August.
Wages grew by 4.6% year-on-year, the slowest pace since July 2021.
“The labor market shifted to a slower pace of growth in the final months of 2024, with both employment and wage growth slowing,” said Nela Richardson, chief economist at ADP.
While there are signs that hiring is slowing, there is little indication that layoffs are increasing.
The Labor Department reported Wednesday that there were just 201,000 new jobless claims for the week ending Jan. 4. This was well below the expected 215,000 and the lowest level since February 2024.
The report was released two days before the Bureau of Labor Statistics’ closely watched nonfarm payrolls tally. A Dow Jones survey of economists said the report was expected to show an increase of 155,000 jobs, which itself would represent a significant slowdown from the unexpectedly strong 227,000 in November. It turns out. ADP and BLS numbers are often different, sometimes by a large amount.
Fed policymakers are watching the jobs report closely as they plan their next move in monetary policy. Most Fed officials said they believed the labor market was strong but aimed to ease interest rate limits so as not to threaten job creation.
He also expressed more confidence that inflation is stable, although it remains above the Fed’s 2% target. The ADP numbers could further strengthen the case that wages are not weighing down inflation.
From a sectoral perspective, the greatest job creation was in education and health services, with 57,000 jobs added. Other significant increases were in construction (27,000 jobs), leisure and hospitality (22,000 jobs), and financial activities (12,000 jobs).
Job losses were reported in several sectors, including manufacturing (-11,000), natural resources and mining (-6,000), and professional and business services (-5,000).
Most of the job openings came from large companies with 500 or more employees, totaling 97,000 jobs.
