Washington (AFP) – The US private sector added fewer jobs than anticipated in December, payroll firm ADP said Wednesday, with hiring and wage increases both cooling. Private sector employment rose by 122,000 jobs last month, said ADP, missing a consensus forecast of 131,000 according to Briefing.com.
“The labor market downshifted to a more modest pace of growth in the final month of 2024, with a slowdown in both hiring and pay gains,” said ADP chief economist Nela Richardson. She added that health care added more jobs than other sectors in the second half of the year. The figure for December was also a slowdown from November’s employment gain of 146,000.
In particular, hiring in manufacturing contracted for a third consecutive month, the report said. Most job increases were in the service-providing industries, with education and health services adding 57,000 roles. The bulk of job gains were also driven by companies employing 500 people or more. This adds to “evidence that small businesses are under the most financial pressure,” said Samuel Tombs, chief US economist at Pantheon Macroeconomics.
Analysts cautioned that ADP’s data is not always an effective gauge of the government employment report due Friday, although it helps them understand the big picture. “Right now, that picture is one of still substantial increases in jobs by a fast-growing economy but a slowing trend in job creation,” said Carl Weinberg, chief economist at High Frequency Economics. “Today’s figures do not upset that trend,” he added.
According to ADP, wage gains slowed in December, with those staying in their jobs seeing pay growth ease to 4.6 percent. This was the slowest pace since July 2021. For those who changed jobs, pay growth was 7.1 percent, slightly below November as well. Weinberg added that he expects the US economy to keep creating jobs until next year, stressing that “slower job growth in a slower-growing economy is not a recession.” He also said that the Federal Reserve “should not rush its rate-cutting agenda based on these figures.”
© 2024 AFP
