Private payrolls rose 41,000, slightly below expectations,
Private sector job creation in December showed signs of improvement, according to a report from payrolls processing firm ADP. While the pace of hiring was slightly below expectations, with 41,000 jobs added during the month, it marked a turnaround from the decline seen in November.
The bulk of the job growth came from the services sector, with education and health-related fields adding 39,000 jobs and leisure and hospitality contributing 24,000. However, professional and business services saw a loss of 29,000 jobs, while information services shed 12,000 positions. In the goods-producing industries, there was a net loss of 3,000 jobs, primarily due to a decline in manufacturing.
Interestingly, the job gains were mostly driven by small businesses, with companies employing fewer than 500 workers accounting for the majority of the new hires. Larger firms added just 2,000 jobs in December.
Despite the increase in employment, wage gains remained modest. On average, workers who stayed in their jobs saw a 4.4% increase in wages compared to the previous year, while job changers experienced a 6.6% increase.
The ADP report comes just ahead of the release of the nonfarm payrolls count from the Bureau of Labor Statistics, which had been delayed due to the government shutdown. Economists are expecting the BLS report to show an increase of 73,000 jobs in December, with the unemployment rate edging down to 4.5%.
Overall, the positive job creation numbers in December offer a glimmer of hope for the labor market, which had been struggling in the latter part of 2025. As the economy continues to recover, it will be important to monitor the trends in job growth and wage increases to assess the health of the labor market.
