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Saturday’s: 9AM 1590 AM/97.9 FM KVTA
Sunday’s: 7AM K-EARTH 101 FM
Hiring by U.S. companies picked up steam in December, a sign the jobs market remains healthy even in the face of steep Federal Reserve interest rate hikes, according to the ADP National Employment Report released Thursday morning.
Companies added 235,000 jobs last month, easily beating the 150,000 gain that economists surveyed by Refinitiv had predicted. Data for November was revised to show that 127,000 jobs were added.
The stronger-than-expected report comes as the Fed wages the most aggressive fight since the 1980s to crush inflation and slow the labor market with higher interest rates.
However, the hiring was not broad-based: While the goods-producing sector added just 22,000 new positions, services providers added 213,000. The bulk of the gains in December stemmed from the leisure and hospitality industry, which added 123,000 new workers. Professional services followed with 52,000 hires, and it was trailed by education and health services with an increase of 42,000.
“The labor market is strong but fragmented, with hiring varying sharply by industry and establishment size,” said Nela Richardson, the chief economist at ADP. “Business segments that hired aggressively in the first half of 2022 have slowed hiring and in some cases cut jobs in the last month of the year.”
The biggest losses, meanwhile, were in the trade, transportation and utilities sector, which saw payrolls decline by 24,000.Financial activities shed 12,000 jobs, while natural resources and mining lost 14,000.
By size, large businesses accounted for the entirety of the job losses, shedding 151,000 positions in December. Small businesses, meanwhile, added 195,000 workers, while medium businesses that employ between 50-499 workers had job gains of 191,000.
Despite the surprise increase in payrolls in December, pay increases dropped to the lowest level since March 2022, according to the report, which is now conducted alongside Stanford Digital Economy Lab. Wages climbed 7.3% in December, below the 7.3% recorded in November. The Fed is closely monitoring wage increases – which can fuel price spikes as businesses try to offset the cost of labor – as it tries to wrestle high inflation back to its 2% target.
