ADP: Employers Added 235,000 Jobs in December in a Sign the Labor Market Remains Strong | Economy

Private employers added 235,000 jobs in December, as the labor market closed out 2022 on a strong footing despite a slowing economy and high interest rates, human resources firm ADP said Thursday.

The gains were well above expectations of 145,000 and compared to November’s 127,000 increase. Strong gains were seen in the services sector, where 213,000 jobs were added, 123,000 in the leisure and hospitality industry. While small and medium-sized firms added 195,000 and 191,000 workers, respectively, large employers shed 151,000 employees.

“The labor market is strong but fragmented, with hiring varying sharply by industry and establishment size,” said Nela Richardson, chief economist, 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.”

Wages rose 7.3% for the 12 months, slightly below November’s gain, and the lowest increase since March 2022.

Also Thursday, the number of Americans filing for first-time unemployment claims fell by 19,000 to 204,000 from the prior week’s revised level of 223,000. The four-week moving average, meanwhile, dropped by 6,750 to 213,750.

The Federal Reserve is looking for the labor market to weaken, as that would reduce the bargaining power of workers to drive up wages and thereby add to inflationary pressures in the economy.

Political Cartoons on the Economy

The government reported on Wednesday that there were still 10.5 million job openings as of the end of November, a level that means there are 1.7 jobs for every available worker. Friday will bring the Labor Department’s monthly jobs survey for December, with expectations of a gain of about 200,000 jobs for the month.

“The chatter among c-suites about the slowing economy and layoffs didn’t match the reality in November,” said Lightcast Senior Economist Ron Hetrick. “A lot of executives that are sharing their concerns may be thinking into the future without having been personally affected yet.”

Amy Hunter Glaser, vice president of business operations at hiring firm Adecco, says if anything some companies are choosing to shore up and stockpile talent, fearful they could end up shorthanded as they were during the coronavirus pandemic.

“We’re really not seeing a great deal of change,” she says, “there’s still an uptick in health care and hospitality, which is white hot.”

But jobs data is a lagging measure of the economy. Minutes of the Federal Reserve’s mid-December meeting, released Wednesday, showed the central bank expecting to keep interest rates high through 2023. However, the market believes that some of the recent positive downward trend on inflation means the Fed could soften its interest rate posture at its next meeting in February, increasing rates by only 25 basis points.

“The private sector job market is still seeing more churn now than before the pandemic but the labor market should loosen as the global economy slows,” said Jeffrey Roach, chief economist at LPL Financial. “Central banks around the world will likely slow the pace of tightening as economic activity declines.”

Some sectors are already seeing layoffs, with Amazon on Thursday saying it will reduce its workforce by 18,000, more than originally estimated as the online giant trims back from its exuberant hiring during the pandemic. Salesforce also announced layoffs of about 8,000 workers. The tech industry, along with real estate, has been among the sectors where layoffs have picked up in recent weeks, although the overall rate of reductions has been low by historical standards.

A majority of small and midsize business leaders anticipate a recession in 2023, according to JPMorgan Chase’s 2023 annual Business Leaders Outlook survey released Thursday morning. Some 65% of midsize businesses and 61% of small businesses expect a recession in the year ahead, the bank found.

“Inflation has been a challenging headwind impacting businesses of all sizes, across all industries,” said Ginger Chambless, head of research, JPMorgan Chase Commercial Banking. “While we have seen some encouraging signs that inflation has started to moderate and should cool over 2023, businesses may still want to consider adjustments to strategies, pricing or product mixes to help weather the storm in the near-term.”

Sales of toys increased by 206%, video games were up 115%, and apparel and accessories rose 94%.

“At a time when consumers were dealing with elevated prices in areas such as food, gas, and rent, holiday discounts were strong enough to sustain discretionary spending through the entire season,” said Vivek Pandya, lead analyst, Adobe Digital Insights. “The big deals drew in consumers and drove volume, helping retailers who were challenged with oversupply issues, particularly in categories such as apparel, electronics, and toys.”

link

Leave a Reply

Your email address will not be published. Required fields are marked *

Previous post Health Horoscope Today January 1, 2023 Know your health prediction
Next post Doctors Aren’t Happy About the CDC’s New Mask Guidelines for Health Care Settings