December Jobs Report: Private Sector Adds 122,000 Jobs, Pay Gains Slow

The December ADP National Employment Report offers a snapshot of the private-sector labor market, reflecting slowed growth in both hiring and pay gains. While industries like health care led job creation, manufacturing and professional services saw declines.

December 2024 Employment Highlights

1. Overall Job Growth
   • Private employers added 122,000 jobs in December 2024.
   • Hiring slowed across multiple industries, with manufacturing contracting for the third consecutive month.
2. Sector-Specific Changes
   • Goods-Producing Sectors: Net growth of 10,000 jobs.
     • Construction: +27,000 jobs.
     • Manufacturing: -11,000 jobs.
     • Natural resources/mining: -6,000 jobs.
   • Service-Providing Sectors: Net growth of 112,000 jobs.
     • Education/health services: +57,000 jobs.
     • Leisure/hospitality: +22,000 jobs.
     • Financial activities: +12,000 jobs.
3. Regional Employment Trends
   • West Region: Led growth with +82,000 jobs.
   • South Region: Modest increase of +19,000 jobs.
   • Northeast Region: +19,000 jobs, driven by gains in the Middle Atlantic.
   • Midwest Region: Slow growth with only +7,000 jobs.
4. Establishment Size
   • Small establishments (1–49 employees): +5,000 jobs.
   • Medium establishments (50–499 employees): +9,000 jobs.
   • Large establishments (500+ employees): +97,000 jobs.

Pay Insights

1. Pay Growth Trends
   • Year-over-year pay growth for job-stayers slowed to 4.6%, the lowest since July 2021.
   • Job-changers saw pay growth of 7.1%, a slight decline from November.
2. Sector-Specific Pay Growth
   • Goods-Producing Sectors:
     • Construction: +5.1%.
     • Manufacturing: +4.5%.
   • Service-Providing Sectors:
     • Education/health services: +4.9%.
     • Leisure/hospitality: +4.6%.
3. Firm Size Pay Trends
   • Small Firms (1–49 employees): Median pay growth of 3.9%–4.6%.
   • Medium Firms (50–499 employees): Median pay growth of 4.8%.
   • Large Firms (500+ employees): Median pay growth of 4.6%.

Expert Insights

“The labor market downshifted to a more modest pace of growth in December, with health care creating more jobs than any other sector,” said Nela Richardson, Chief Economist at ADP. “The slowdown in hiring and pay gains reflects a broader shift in the private-sector labor market.”

The December 2024 ADP report signals a cooling labor market with slower hiring and pay growth. Despite the downshift, sectors like health care and large employers are driving notable job creation. As the economy adapts, monitoring these trends is key to navigating the evolving labor landscape.