Small businesses registered a recovery during the month, with a net addition of 9,000 employees, after pulling back sharply by 120,000 roles in November.
- Mid-sized and large businesses pulled back, adding 36,000 employees in December, after a net increase of 90,000 employees in the previous month.
- The rebound in private payrolls in December was driven by the services industry, which added 44,000 jobs, while the goods industry lost 3,000 jobs.
- Employees who remained with their current employers experienced a 4.4% median increase in annual pay in December, unchanged from November.
U.S. companies added 41,000 jobs in December, missing expectations but rebounding from November’s decline.
According to data released by payroll processing firm ADP, small businesses registered a recovery during the month, with a net addition of 9,000 employees, after pulling back sharply by 120,000 roles in November.
Mid-sized and large businesses pulled back, adding 36,000 employees in December, after a net increase of 90,000 employees in the previous month.
According to a Dow Jones estimate cited by MarketWatch, analysts expected an addition of 48,000 private payrolls in December.
ADP’s report comes weeks before the Federal Open Market Committee (FOMC) is set to meet for the first time in 2026 to decide its monetary policy direction. According to data from the CME FedWatch tool, there is an 18.3% probability of a 25-basis-point rate cut in January.
Services Fueled Growth
The rebound in private payrolls in December was fueled by the services industry, which had a net addition of 44,000 jobs during the month, while the goods industry witnessed a loss of 3,000 roles.
In the service industry, education and health services, as well as leisure and hospitality services, had a cumulative addition of 63,000 roles during the month, while professional and business services experienced a reduction of 29,000 jobs.
In the goods industry, manufacturing showed a decline of 5,000 jobs during December.
Pay Growth Unchanged For Job Stayers
Employees who remained with their current employers experienced a 4.4% median increase in annual pay in December, which was unchanged from November. However, those who made a job switch saw their pay growth accelerate to 6.6% from 6.3% in the previous month.
“Small establishments recovered from November job losses with positive end-of-year hiring, even as large employers pulled back,” said Dr. Nela Richardson, chief economist, ADP.
The Midwest, Northeast, and South regions of the country registered an increase of 9,000, 40,000, and 54,000 jobs, respectively, while roles in the West declined by 61,000 in December.
Meanwhile, U.S. equities were mixed in Wednesday’s pre-market trade. At the time of writing, the SPDR S&P 500 ETF (SPY), which tracks the S&P 500 index, was up by 0.07%, the Invesco QQQ Trust ETF (QQQ) fell 0.1%, while the SPDR Dow Jones Industrial Average ETF Trust (DIA) gained 0.18%. Retail sentiment around the S&P 500 ETF on Stocktwits was in the ‘bullish’ territory.
The iShares 7-10 Year Treasury Bond ETF (IEF) was up by 0.25% at the time of writing.
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