The private sector added 64,000 jobs in December, and annual pay was up 5.4% year over year, according to an ADP National Employment Report Economy Lab report released Thursday.
The job count is up from the previous report, which showed 103,000 jobs added in November.
“We’re returning to a labor market that’s very much aligned with pre-pandemic hiring,” ADP Chief Economist Nela Richardson said in a press release issued in conjunction with the monthly report. “While wages didn’t drive the recent bout of inflation, now that pay growth has retreated, any risk of a wage-price spiral has all but disappeared.”
The report analyzes the payroll transactions of more than 25 million US workers. The data, produced by the ADP Research Institute in collaboration with the Stanford Digital Economy Lab, showed a service sector gain of 155,000 jobs overall, with education / health adding 42,000 jobs (compared with 44,000 added the previous month). The biggest gains were seen in the leisure/hospitality sector, which added 59,000 jobs in December.
By US region, private employers in the West had the biggest job gains last month, at 109,000, followed by the Northeast, with 94,000 additional jobs. The South lost 7,000 jobs, and the Midwest lost 21,000.
Firms with 500 or more employees gained 40,000 jobs overall, whereas companies with 50 to 499 workers added 53,000 jobs. Businesses with one to 49 employees collectively expanded by 74,000 jobs.
Pay gains slow
“Pay for job-stayers rose 5.4% in December, slowing from 5.6% a month earlier and continuing a deceleration that began in September 2022,” according to the report.
Firms with one to 19 workers saw the smallest median change in annual pay, at 4.6%. The change was 5.6% for companies with 20 to 49 employees, 5.7% for businesses with 50 to 249 workers, 5.5% for employers with 250 to 499 employees and 5.4% at firms with 500 or more workers.
Unemployment claims drop
Meanwhile, initial filings for unemployment for the week of Dec. 30 decreased by 18,000 from the previous week’s revised level, according to data released Thursday by the Department of Labor.
“The number of Americans filing new claims for jobless benefits dropped to a two-month low last week, pointing to underlying labor market strength even as demand for workers is easing,” Reuters reported. By comparison, in November, new jobless claims had reached a three-month high.
