The U.S. private-sector labor market ended 2024 on a slower note. In December, there was an increase of 122,000 jobs, reflecting moderate growth.
Wage growth also cooled, signaling a labor market easing after recent pressures.
The ADP® National Employment Report™, produced with the Stanford Digital Economy Lab, offers a real-time view of employment trends. It uses anonymized payroll data from over 25 million U.S. workers.
“The labor market downshifted to a more modest pace of growth in the final month of 2024,” Chief economist Nela Richardson said.
She also highlighted the healthcare sector as the standout, creating more jobs than any other sector in the year’s second half.
Job Growth Slows but Remains Positive
Private employers added 122,000 jobs in December, showing that the job market continues to strengthen despite difficulties.
The report highlighted mixed trends across industries, regions, and employer sizes.
Goods-producing industries added 10,000 jobs, led by construction, which added 27,000 positions.
However, manufacturing continued declining, shedding 11,000 jobs for the third month.
Natural resources and mining also contracted, losing 6,000 roles.
Service-providing sectors dominated, adding 112,000 jobs. Education and health services led with 57,000 positions. Leisure and hospitality grew by 22,000, likely boosted by seasonal demand.
Other services and financial activities followed, adding 13,000 and 12,000 jobs, respectively.
Trade, transportation, and utilities gained 8,000 jobs. However, professional and business services struggled, losing 5,000 positions.
The West region showed the most substantial growth, adding 82,000 jobs. The Pacific region contributed 56,000 of these, with the Mountain region adding 26,000.
The South followed with 19,000 jobs, driven by gains in the West South Central area (+16,000).
The Northeast added 19,000 jobs, New England 6,000, and the Middle Atlantic 13,000. The Midwest lagged, adding just 7,000 jobs, with declines in East North Central (-2,000) offsetting gains in West North Central (+9,000).
Large establishments (500+ employees) led job creation, adding 97,000 positions. Medium-sized businesses (50-499 employees) added a modest 9,000 jobs.
Small establishments (1-49 employees) struggled, adding just 5,000 positions. Firms with fewer than 20 employees lost 1,000 jobs, reflecting challenges for the smallest employers.
Wage Growth Slows Across the Board
Pay growth decelerated in December, indicating an easing labor market. Job-stayers saw a median pay increase of 4.6%, the slowest since July 2021.
Job changers experienced more substantial growth, with a median increase of 7.1%, slightly lower than in November.
In goods-producing sectors, construction led with a 5.1% median pay increase. Manufacturing followed at 4.5%, while natural resources and mining lagged at just 3.8%. Service-providing industries fared better overall.
Education and health services saw robust pay growth of 4.9%. Leisure and hospitality maintained steady gains at 4.6%. Financial activities, trade, transportation, and utilities followed with 4.9% and 4.4% increases, respectively.
Pay increases were highest among medium-sized firms (50-499 employees) and large firms (500+ employees), reporting 4.8% growth. Smaller firms (20-49 employees) matched this rate.
The smallest firms (1-19 employees) lagged, with a median pay increase of only 3.9%.
The December ADP Employment Report provides a clear snapshot of a labor market in transition. Hiring slowed, but the market remains steady overall. Wage growth cooling reflects an easing of labor pressures.
The healthcare and education sectors continued to drive growth, showing resilience and strong demand. In contrast, manufacturing and professional services faced sustained challenges.
Large businesses remained the backbone of job creation, adapting effectively to economic changes.
Regionally, the West emerged as a leader, with robust growth in the Pacific region. However, the Midwest struggled, highlighting geographic disparities in job creation.
The labor market’s path will depend on broader economic factors. Slower wage growth may alleviate inflation concerns. However, sector-specific and regional differences will continue to shape hiring trends.
Businesses and policymakers must watch these developments closely to adapt their strategies.
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About the author
Andy Cale is a seasoned journalist and commentator with over a decade of experience covering global news and events. He specializes in delivering insightful opinions and in-depth analysis on current affairs, shedding light on the key issues shaping our world today.
