ADP said the private economy added a net 235k jobs in December, above the estimate of 150k and vs 127k in November and 239k in October. Small and medium sized businesses drove all of the hiring as companies with more than 500 people shed 151k jobs.
The service sector added 213k, strangely the exact same amount seen in November but with a different mix. Leisure/hospitality led the way with net hiring of 123k vs 224k in November. Professional/business services added 52k after shedding 77k last month. The financial service sector, likely mostly in mortgages, lost jobs again as they did in November. Trade/transportation/utilities lost 24k jobs after hiring 62k last month.
The goods sector hired 22k people with all coming from construction (likely not in residential) as manufacturing lost 5k people after losing 100k in November. The natural resource sector lost 14k jobs after adding 16k in November.
The chief economist at ADP said “The labor market is strong but fragmented, with hiring varying sharply by industry and establishment size. Business segments that hired aggressively in the first half of 2022 have slowed hiring and in some cases cut jobs in the last month of the year.”
The other thing of note is the large wage gains employees are still seeing. ADP said the median change in annual pay for job stayers was 7.3% and for those jumping ship to someplace else, a 15.2% pay raise. And this is what the Fed keeps harping on and why they want to keep hiking rates and to leave them elevated all year. Bonds are selling off in response.
Smoothing out the monthly noise puts the 3 month average of private sector job gains at 219k vs the 6 month average of 217k, the full yr 2022 average of 306k and the 2021 average of 357k, so a clear case of moderation in hiring.
Initial jobless claims fell to 204k from 223k but around the holidays you must just look at the 4 week average which was 214k vs 221k in the week before as a print of 231k fell out. Continuing claims fell back below 1.7mm at 1.694mm. The bottom line remains the same in that the pace of firing’s still remains muted overall but continuing claims has trended up to around the highest since February because the pace of hiring’s is slowing.
Peter is the Chief Investment Officer at Bleakley Advisory Group and is a CNBC contributor. Each day The Boock Report provides summaries and commentary on the macro data and news that matter, with analysis of what it all means and how it fits together.