ADP report points to slower job growth
Private sector employers added 122,000 jobs in December, below the 136,000 forecast by economists. This was the smallest increase since August, compared to the revised 146,000 in November. ADP also reported that wage growth has slowed to the weakest pace since July 2021.
“The labor market shifted back to a more modest pace of growth,” noted Nela Richardson, ADP’s chief economist. This cooldown in hiring and wage growth could ease inflationary pressures, reinforcing expectations of a softer approach from the Fed.
Jobless claims show stability in the labor market
Despite the slowdown in hiring, unemployment claims were mixed. Initial jobless claims fell to 201,000 for the week ending Jan. 4, lower than the 215,000 economists had expected. This was the lowest level in almost a year.
However, continuing claims rose by 33,000 to 1.87 million, suggesting some workers are struggling to find new work. The decline in initial claims reflects employers’ reluctance to cut staff, indicating continued strength in the labor market.