ADP Employment Growth Improves in December; Earnings Gain Slips
by:Tom Moeller
|in:Economy in Brief
Summary
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Employment strength is seen in small- and medium-sized firms.
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Leisure & hospitality, professional & education lead employment increase.
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Pay gains decelerate across industry groups.
Nonfarm private sector payrolls increased 235,000 during December after rising 182,000 in November, revised from 127,000. The 239,000 October gain was unrevised. The 3.0% rise during all of last year compared to 3.7% growth in 2021 and a 4.3% decline in 2020. A 133,000 December increase had been expected in the Action Economics Forecast Survey.
Growth in median annual pay for "job stayers" eased to 7.3% y/y last month from a September high of 7.8% y/y. These compare to a low of 1.6% in March of 2021. The earnings increase was led by 10.1% growth in leisure & hospitality earnings, but down from 16.9% y/y growth in March 2022. Financial sector earnings rose a lessened 7.5% y/y. Factory sector pay rose a diminished 7.3% y/y while professional & business service sector earnings rose a smaller 6.6% y/y. By gender, female median pay rose 7.5% y/y while men’s earnings rose 7.1% y/y. Pay gains have been strongest in the 16-to-24-year-old age group (14.1% y/y) followed by 10.4% in the 25-34 age group. Earnings in the 35-54 age group rose 7.1% y/y and 4.8% y/y in the 55-85 age bracket, both up versus early 2021.
Small businesses hiring (1-49 employees) strengthened 195,000 (1.6% y/y) after increasing 49,000 in November, revised from a 51,000 decline. Employment at firms with 50-499 employees rose 191,000 (3.9% y/y) after a 26,000 November decline. The 128,000 three-month average increase compared to 98,000 in November. Employment at large firms (500+ employees) declined 151,000 (+5.1% y/y) last month after rising 55,000 in November. Large-sized payrolls fell an average 33,000 during the last three months compared to a 107,000 average three-month gain as of April.
By industry group, goods-producing employment rose 22,000 (2.4% y/y) after a 19,000 November rise. Factory sector jobs declined 5,000 (+0.7% y/y), the fourth straight monthly drop. Construction employment rose 41,000 (3.9% y/y) after increasing 55,000 in November.
Service-producing jobs rose 213,000 last month following a 163,000 November increase. Annual growth of 3.2% compares to a 4.9% high as of April 2022. Leisure & hospitality employment led the gain with a 123,000 increase (7.8% y/y) after rising 156,000 in November. Professional & business services employment improved 52,000 (1.8% y/y) after four consecutive monthly declines. Education & health care sector employment improved 42,000 (1.4% y/y) after strengthening 166,000 in November. Information sector jobs edged 1,000 higher (3.1% y/y) following a 12,000 increase. To the downside, trade, transportation & utilities payrolls fell 24,000 (+3.1% y/y) after a 19,000 November decline while financial activities employment fell 12,000 (-0.9% y/y), off for the fifth month in the last six.
By Census region, employment in the South surged 253,000 (2.8% y/y) following three straight monthly declines. Employment in the Northeast improved 54,000 (3.8% y/y) following a 33,000 November increase. Jobs in the Midwest rose 70,000 (1.6% y/y) after increasing 29,000 in November. In the West, payrolls declined 142,000 last month (+4.2% y/y) after surging 210,000 in November.
The ADP National Employment Report and Pay Insights data can be found in Haver's USECON database. Historical figures date back to January 2010 for private employment. Pay data date back to October 2020. The expectation figure is available in Haver's AS1REPNA database.
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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