US Private Employment Increases by 122,000 in December, Lowest in Four Months

Manufacturing Employment Declines for 3 Consecutive Months
Wage Growth Rate 4.6%... Lowest in 3 Years and 4 Months
Unemployment Benefit Claims Below Expectations
Labor Department Employment Report on the 10th in Focus

Last month, the increase in private employment in the United States fell significantly short of market expectations, according to survey results. Signs of a cooling labor market also appeared, with wage growth hitting its lowest level since July 2021.

According to the U.S. employment report released by ADP, a private labor market research firm, on the 8th (local time), private sector new employment increased by 122,000 in December last year.

This is the lowest figure in four months since August last year. It fell short of both the November figure of 146,000 new private jobs and the market expectation of 139,000.

By industry, manufacturing employment decreased by 11,000, marking a decline for three consecutive months. Employment also slowed in several sectors, with natural resources and mining down by 6,000 and professional and business services down by 5,000. On the other hand, employment in education and health services increased by 57,000, while construction and leisure and hospitality rose by 27,000 and 22,000 respectively.

The wage growth rate was 4.6% year-on-year, marking the lowest level since July 2021. This is interpreted as a sign that the pace of new private employment is slowing.

Nela Richardson, ADP’s chief economist, analyzed, "The labor market moved downward at a more moderate growth pace in the last month of 2024," adding, "Both employment and wage growth have slowed."

On the other hand, unemployment insurance claims, which indicate layoff trends among U.S. companies, decreased contrary to expectations, showing mixed employment indicators. According to the U.S. Department of Labor, new unemployment insurance claims for the week of December 29 to January 4 totaled 201,000, down 10,000 from the revised figure of 211,000 the previous week. This is the lowest level in 11 months since February last year and also 13,000 below experts’ expectations of 214,000.

Continuing unemployment insurance claims, which represent claims for at least two weeks, recorded 1,867,000 for the week of December 22 to 28. Although this was an increase of 33,000 from the revised figure of 1,834,000 the previous week, it was 3,000 below market expectations of 1,870,000.

However, the ADP private employment report does not provide an accurate picture of the labor market, and weekly unemployment insurance claims tend to show increased volatility at year-end. The most reliable employment trends can be confirmed in the December employment report to be released by the Department of Labor on the 10th. The market expects nonfarm payrolls to have increased by 154,000 in December, down from 227,000 in the previous month. The unemployment rate is expected to have remained steady at 4.2%.