Employers added 235,000 jobs in the private sector last month, while annual pay rose 7.3% year over year, payroll processor ADP reported Thursday, although larger companies actually subtracted jobs.
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"Though the fourth-quarter monthly average is a marked deceleration from the pace of job gains in the first half of 2022, the average is higher in the fourth quarter than it was in the third," said Nela Richardson, chief economist with ADP, during a conference call Thursday with reporters. "That tells us that over the course of 2022, we did see a deceleration in job gains, but the slowdown was not happening in a straight line. This is a fragmented market, with sectors showing variance in their pace of hiring. When we started the jobs recovery, small firms really kicked off that recovery. They were the first to resume hiring after the depths of the pandemic. But as we proceeded through that recovery, large firms' hiring soon overwhelmed the small firms' efforts to get their headcount back and larger firms hired aggressively, midway and then throughout most of the recovery period. That trend has changed. Large firms have seen a staggered slowdown. For establishments with over 500 employees, we actually saw job cuts of 151,000 for large firms in December."
The service-providing sector accounted for the bulk of the job gains last month, adding 213,000 jobs, including 52,000 in professional and business services such as accounting and tax preparation, but that was partially offset by a loss of 12,000 jobs in financial activities like banking. The leisure and hospitality industry added 123,000 jobs.
The goods-producing sector added 22,000 jobs, and the construction industry gained 41,000 jobs, but that was somewhat offset by losses of 5,000 jobs in manufacturing and 14,000 in natural resources and mining.
December saw the largest decline in pay growth for people who stayed in their jobs in three years. Leisure and hospitality; trade, transportation and utilities; and the information sector experienced the sharpest declines in pay gains for job stayers. Job changers' pay growth also fell to the lowest level in 10 months. On an annual basis, though, the trend was more positive, with a median change in annual pay of 7.3% for job-stayers and 15.2% for job changers.
