US private payrolls miss expectations in December
ADP’s national employment report shows that private employment in the United States rebounded less than expected in December.
Private employment rose by 41,000 jobs last month, following a revised 29,000 decline in November.
Economists polled by Reuters had forecast private employment would rise by 47,000 jobs in November, following a previously reported decline of 32,000.
The services sector was responsible for the recovery, adding 44,000 positions, while the professional and business services sector lost 29,000 jobs and employment in the information sector decreased by 12,000.
Payrolls in the goods-producing sector decreased by 3,000 jobs, while in the manufacturing sector, they decreased by 5,000 positions.
Construction payrolls increased by 1,000 jobs.
“The visual signal from today’s headline is that jobs were gained in December, but at a relatively slow pace,” said Carl Weinberg, chief economist at High Frequency Economics.
The ADP report was developed in partnership with the Stanford Digital Economy Lab.
This report was released ahead of the Bureau of Labor Statistics’ more comprehensive and closely watched December employment report due out Friday.
The monthly estimate has historically differed from the private payroll count in the government’s employment report; some economists said this limited its value as a labor market indicator.
“ADP’s payroll forecast continues to attract more attention than its track record warrants,” said Samuel Tombs, chief U.S. economist at Pantheon Macroeconomics.
“Its initial estimate of private payrolls has deviated by an average of 83,000 from the first official estimate since its methodology was overhauled in August 2022.”
Although employment growth has slowed significantly due to weak demand for labor, layoffs remain relatively low by historical standards. –
Economists say policy uncertainty, mostly related to import tariffs, has left businesses reluctant to increase headcount.
Some employers are reducing workforce needs by integrating artificial intelligence into certain roles.
A Reuters poll of economists predicts the BLS report will show private payrolls increased by 64,000 in December after rising 69,000 in November.
With further government job losses expected, overall nonfarm employment is estimated to have risen by 60,000 last month after rising 64,000 in November.
But attention is likely to be on the unemployment rate, which is forecast to fall to 4.5 percent after jumping to 4.6 percent in November, the highest level in more than four years.
The November unemployment rate was partially distorted by the 43-day federal government shutdown, which also prevented the collection of household data for October.
The October unemployment rate was not published for the first time since the government began monitoring the series in 1948.
