Hiring in the private sector increased at a faster rate than expected in December. This indirectly carries a hint that at the end of 2023, the U.S. jobs market remains strong according to the ADP report on Thursday.
Private payrolls increased by 164,000 for the month, a big increase from the 101,000 originally assessed in November and better than the 130,000 estimate of the Dow Jones consensus.
Recovery in the licensing and hospitality sector was the main driver of the surge with an addition of 59,000. Hotels, restaurants and bars have contributed to job creation after being hit at the start of the Covid-19 pandemic. Waima so job creation in this industry has been slow in recent months. The sector is also a factor in salary increases, with annual growth of 6.4%.
The construction sector also contributed 24,000 to the total, while the other services and other support businesses categories added 22,000 jobs. Financial activity also increased by 18,000 jobs. There were only a few categories that decreased in the month, with the refining sector decreasing by 13,000 and information services and natural resources including mining both decreasing by 2,000.
On the other hand, income growth rates were reported to be slower, with the labor market seeing annual income increase by 5.4% while job exchange saw income increase 8%, ADP reported. In terms of size, companies of less than 50 employees contributed with 74,000 new jobs.
ADP data is released the day before NFP data, where the data is paid more attention by the Department of Labor, and these two reports may differ due to differences in methodology. Economic experts interviewed by Dow Jones expect December nonfarm job growth of 170,000, after recording a reading of 199,000 in November, which was nearly double the ADP estimate.
Federal Reserve officials watch jobs reports closely for clues about the labor market and its impact on inflation. According to minutes released Wednesday from a December meeting of the Federal Open Market Committee, the central bank's rate-setting panel, officials saw the labor market becoming more balanced.
