U.S. ADP Payroll Gain Moderates in December

The ADP National Employment Report indicated that nonfarm private sector payrolls rose 122,000 (1.4% y/y) during December, after increasing 146,000 during November. These increases leave the 154,000 average in Q4 above its 129,333 average in Q3 but below this year’s high of 181,000 in March. A 138,000 November rise in ADP employment had been expected in the Action Economics Forecast Survey.

Growth in median annual pay for "job stayers" of 4.6% y/y in December down from 4.8% y/y in November and remains the weakest since July 2021 and well below a September 2022 high of 7.8% y/y. Pay increases in education & health services were 4.9% y/y. Construction sector earnings rose 5.1% y/y. Manufacturing pay growth of 4.5% y/y is the lowest in 2024; leisure & hospitality pay rose a diminished 4.6 % y/y. Professional & business services pay grew a slower 4.5% y/y. Pay increases for “job changers” averaged 7.1% y/y in December, down from 7.2% y/y in November.

Small business hiring (less than 50 employees) rose by 5,000 (0.1% y/y) in December, following a decline of 15,000 in November, revised from a decline of 17,000. Employment at medium-sized firms (50-499,000 employees) rose 9,000 (1.6% y/y) after an increase of 44,000, revised from 42,000 in November. These gains remained below the March high of 113,000. Large business hiring (500+ employees) rose 97,000 (4.0% y/y) in December, following a 113,000 gain during November, revised from 120,000.

Goods-producing employment rose 10,000 (1.5% y/y) last month, after a 9,000 rise in November, revised from 6,000. The number of construction sector jobs rose 27,000 (4.8% y/y) following 23,000 gain in November, revised from 30,000. Jobs in the manufacturing sector fell 11,000 (-0.4% y/y) in December, after a 16,000 decline in November, revised from a decline of 26,000. Natural resource & mining hiring dropped by 6,000 (+0.9% y/y) last month, following a 2,000 gain in November.

The number of service-producing jobs rose 112,000 (1.4% y/y) during December, following a 137,000 rise in November, revised from 140,000. Education employment strengthened 57,000 (1.7% y/y) last month, after rising 52,000 in November, revised from 50,000. The number of jobs in trade, transportation & utilities increased 8,000 (1.0% y/y), after a 29,000 gain in November, revised from 28,000. Employment in “other” services rose 13,000 (4.1% y/y), following a 15,000 gain in November, revised from 20,000. Professional & business services employment eased 5,000 (0.2% y/y) in December, after rising 19,000 the prior month, revised slightly from 18,000. Leisure & hospitality employment rose 22,000 (2.4% y/y) last month, from a 17,000 rise, revised from15,000 in November. Financial sector employment rose 12,000 (2.0% y/y) in December, from 3,000 in November, revised from 5,000, while information employment rose 5,000 (-1.2% y/y) from 2,000 last month, revised down from 4,000.

The ADP National Employment Report and Pay Insights data can be found in Haver's USECON database. Historical figures date back to January 2010 for private employment. Pay data date back to October 2020. The expectation figure is available in Haver's AS1REPNA database.

The minutes to the latest FOMC meeting can be found here.