Employers in the private sector expanded their payrolls last month, though not by as much as economic forecasts had predicted.
Key Facts:
• ADP reported 122,000 new private sector jobs were created in December.
• Economists had anticipated around 140,000 new positions.
• November’s number stood at 146,000, showing a downward shift in hiring.
• Health care took the lead in job creation in late 2024.
The Rest of The Story:
According to payroll processing firm ADP, companies finished the year with more moderate growth.
Their latest findings indicated a cooling trend in hiring, especially compared to stronger figures seen earlier in 2024.
While this drop may hint at an economy that is tempering its pace, the overall job market still shows many employers trying to fill gaps in certain sectors.
Nela Richardson, ADP’s chief economist, said December’s report reflects a slower period for both hiring and pay increases.
Despite those challenges, the health care industry stood out by adding more positions than any other field in the second half of the year.
This suggests that demand for essential medical services continues to rise, and that health-related organizations are working hard to keep up.
Economists view ADP’s numbers as an important but separate snapshot of the labor market, which will be clarified further once the government releases its official employment figures.
It remains to be seen whether this slowdown will continue in January or if it is tied to the usual year-end lull when business activity sometimes tapers off.
“From our perspective, what we've seen all year is very stable hiring. We saw a pick-up in October,” says @ADP's @NelaRichardson. “This December report represents a downshift from what we saw earlier in the quarter. But it's still a solid number.” https://t.co/vMcvVa8WYi
— Squawk Box (@SquawkCNBC) January 8, 2025
The Bottom Line:
December’s weaker-than-expected job gains show a measured finish to 2024’s job market expansion.
Key sectors like health care still posted significant hiring, giving economists reasons for cautious optimism about the new year.
Many will be watching next month’s numbers to see if this slower trend is here to stay or if it is just a pause.
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For now, experts say the jobs outlook remains moderately positive despite the dip.