Private-sector employment in the U.S. increased by 122,000 jobs in December, marking a slowdown in hiring as 2024 drew to a close. The latest ADP National Employment Report, produced in collaboration with the Stanford Digital Economy Lab, also reported annual pay growth of 4.6%, the lowest rate since July 2021.
The December jobs report highlighted varied growth across industries. The goods-producing sector added 10,000 jobs overall, driven by a gain of 27,000 in construction. However, manufacturing saw its third consecutive month of decline, shedding 11,000 positions, while natural resources and mining lost 6,000 jobs.
The service-providing sector added 112,000 jobs, with the education and health services industry leading the way, adding 57,000 positions. Other notable gains included leisure and hospitality (+22,000), financial activities (+12,000), and other services (+13,000). Trade, transportation, and utilities grew modestly by 8,000 jobs, while professional and business services lost 5,000 positions.
The Western U.S. accounted for the bulk of December’s growth, with 82,000 jobs added, led by gains in the Pacific region (+56,000) and Mountain region (+26,000). The South and Northeast each added 19,000 jobs, while the Midwest saw more modest growth of 7,000.
Job creation was most robust among large establishments, which added 97,000 jobs. Medium-sized establishments contributed 9,000 jobs, while small establishments added 5,000 positions, with a slight decline among the smallest businesses (1-19 employees).
Annual pay growth for job-stayers slowed to 4.6%, reflecting a deceleration in wage gains as the labor market cooled. Pay growth for job-changers also declined slightly, reaching 7.1%.
By industry, pay gains were highest in construction (+5.1%) and financial activities (+4.9%), while the natural resources and mining sector saw the lowest growth (+3.8%). Across firm sizes, medium-sized businesses (50-499 employees) reported the strongest pay growth for job-stayers, at 4.8%.
“The labor market downshifted to a more modest pace of growth in the final month of 2024, with a slowdown in both hiring and pay gains,” said Nela Richardson, chief economist at ADP. “Health care stood out in the second half of the year, creating more jobs than any other sector.”
