US private hiring rose in December but pay growth slowed: survey
January 5, 2023 09:32 PM
Hiring in the United States jumped in December with a boost from service industries, although salary growth slowed, payroll firm ADP said Thursday.
Private employment bounced by 235,000 jobs last month, more than analysts expected, with job creation robust across small and medium establishments, according to an ADP survey.
"The labor market is strong but fragmented, with hiring varying sharply by industry and establishment size," ADP chief economist Nela Richardson said in a statement.
In particular, firms that hired aggressively in the first half of last year eased their pace, and in some instances cut jobs in the final month of the year, she added.
The labor market has been a key area that policymakers are eyeing as they battle to bring down surging inflation in the world's biggest economy.
One area of concern is growing wages as companies competed to find and retain workers, with fears that this could spill into increasing costs for services, making inflation more persistent.
But in December, workers saw the lowest pay growth since March 2022, according to ADP numbers, potentially bringing some relief.
Employees' annual pay gains eased to 7.3 percent in the recently revamped report which includes wage data.
"December ushered in the largest decline in pay growth for job stayers in the three-year series history," ADP added.
For those who switched jobs, annual pay was up 15.2 percent.
In December, although smaller firms saw stronger employment gains, large establishments had a drop in employment of 151,000 jobs, ADP added.
Among sectors, leisure and hospitality saw big gains, although other areas like trade and transportation reported losses.
The data may offer a preview of the government employment report due to be released Friday, although the ADP report does not always align with official figures.