Employment growth in the US private sector has decelerated more than anticipated in December, as reported by Automatic Data Processing. According to the data, private employment advanced by only 122,000 jobs last month, falling short of the expected rise of 139,000 jobs, as compiled in a recent survey.
Additionally, the job gains for November were revised to a steady 146,000. Nela Richardson, Chief Economist at ADP, noted that '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.' Notably, the health care sector has distinguished itself by creating more jobs than any other sector in the second half of the year. The report indicated that annual wage growth for those staying in their jobs slowed to 4.6% in December compared to previous months, while wage increases for job changers slightly dipped to 7.1%.
Looking at the breakdown by industries, service-related sectors contributed significantly to job additions, with a total of 112,000 jobs created. The education and health services sectors led the way with a remarkable gain of 57,000 jobs, followed by the leisure and hospitality sector, which added 22,000 jobs.
In contrast, the goods-producing sector saw a more moderate increase with just 10,000 jobs, mainly driven by construction activities. It's important to highlight that manufacturing employment contracted for the third consecutive month, as the report suggests ongoing challenges in that area. In terms of job creation dynamics, large businesses accounted for 97,000 jobs last month, whereas small and medium-sized establishments reported lower gains of 5,000 and 9,000 jobs, respectively. Looking ahead, the Bureau of Labor Statistics is anticipated to provide an update on Friday, forecasting that the US economy added 163,000 nonfarm jobs in December.
This figure would represent a notable decrease compared to the impressive gain of 227,000 jobs observed in the previous month. A recent government report indicated that job openings in the US, which is the world's largest economy, surged to their highest level in six months in November, despite a slight rise in layoffs. Price: 291.50, Change: +3.10, Percent Change: +1.07.