04.01.202413:44:00UTC+00U.S. Private Sector Employment Climbs More Than Expected In December

Partly reflecting a healthy bump in leisure and hospitality hiring, payroll processor ADP released a report on Thursday showing private sector employment in the U.S. increased by more than expected in the month of December.

ADP said private sector employment climbed by 164,000 jobs in December after rising by a downwardly revised 101,000 jobs in November.

Economists had expected private sector employment to grow by 115,000 jobs compared to the addition of 103,000 jobs originally reported for the previous month.

"We're returning to a labor market that's very much aligned with pre-pandemic hiring," said ADP chief economist Nela Richardson.

The report said employment in the leisure and hospitality sector increased by 59,000 jobs during the month, while employment in the education and health services sector climbed by 42,000 jobs.

Employment in the construction sector also climbed by 24,000 jobs, but employment the manufacturing sector dipped by 13,000 jobs.

Meanwhile, ADP said annual pay growth for job-stayers slowed to 5.4 percent in December from 5.6 percent in November. Pay for job-changers surged by 8.0 percent year-over-year.

"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," said Richardson.

On Friday, the Labor Department is scheduled to release its more closely watched monthly employment report, which includes both public and private sector jobs.

Economists currently expect employment to increase by 170,000 jobs in December after jumping by 199,000 jobs in November. The unemployment rate is expected to inch up to 3.8 percent from 3.7 percent.