U.S. Hiring Picks Up Pace in December But Doesn't Fuel Faster Wage Growth, ADP Reports

By Joshua Kirby

Hiring among U.S. private-sector employers picked up pace in December but pay gains slowed, adding to signs of a soft landing for the economy.

Employment in the nonfarm private sector rose by 164,00 jobs, accelerating from 101,000 in November, according to data from the ADP National Employment Report released Thursday. Economists polled by The Wall Street Journal had expected a shallower uptick to 130,000 new jobs.

The labor market is returning to prepandemic trends, said Nela Richardson, chief economist at ADP. "[The] market [is] very much aligned with prepandemic hiring," she said.

Services including, hospitality and education led the gains, adding 155,000 jobs in total. Goods-producing sectors added fewer jobs, and manufacturing shed 13,000. By region, the West and Northeast added the most jobs, with 109,000 and 94,000, respectively. Some 21,000 jobs were lost in the Midwest, conversely.

Despite the uptick in jobs, annual wage growth continued to slow, easing to 5.4% from 5.6% a month earlier. This marks a new slowest rate since September 2021, and puts an end to any fears of higher salaries driving a renewed rise in inflation, Richardson said.

"While wages didn't drive the recent bout of inflation, now that pay growth has retreated, any risk of a wage-price spiral has all but disappeared," Richardson said.

Pay data is based on the salaries of almost 10 million individual employees over a 12-month period. The ADP estimate is based on aggregated payroll data of more than 25 million U.S. workers and is independent from U.S. Labor Department official data.

Write to Joshua Kirby at joshua.kirby@wsj.com; @joshualeokirby

(END) Dow Jones Newswires

January 04, 2024 08:54 ET (13:54 GMT)

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