The private sector added 153,000 jobs in December, according to payroll giant ADP, as job gains slackened somewhat at the end of the year, and fell in certain production industries.
Small businesses added 18,000 jobs. While there were job losses of 3,000 at businesses with between one and 19 employees, that was offset by job gains of 21,000 at companies with between 20 and 49 employees. Midsize businesses with between 50 and 499 employees gained 71,000 jobs. Large businesses added 63,000 jobs, including 8,000 at companies with between 500 and 999 employees, and 56,000 at larger companies with 1,000 employees or more.
The service sector added 169,000 jobs in December, including 24,000 in the professional and business services area, which includes accounting and tax preparation, along with other services. The financial activities sector added 10,000 jobs, while the combined trade, transportation and utilities sector added 82,000. However, there were job losses of 6,000 in the information industry.
The goods-producing sector saw declines of 16,000 jobs, including losses of 9,000 jobs in manufacturing, 5,000 in natural resources and mining, and 2,000 in construction.
“The rate of job growth has slowed a bit from where we were last year, and actually through the last several years, but still 150K is a good, solid number,” said Mark Zandi, chief analyst at Moody’s Analytics, which compiles the monthly national employment report with ADP, during a conference call with reporters Thursday. “That’s not quite double the pace that is necessary to absorb the growth in the working age population. So the labor market remains strong. Job growth is very broad based, although as has been the case over the past couple of years, the goods side of the economy is soft. The resource and mining sector continues to reduce payrolls. It’s still struggling to adjust to the lower oil prices. Manufacturing has been soft. The strong value of the dollar and the weak global economy have crimped exports and the trade balance has eroded. That’s weighed on manufacturing. The vehicle side of manufacturing is fine. It has been a record year for vehicle sales, but the trade-sensitive sectors have been softening. More recently construction has been on the soft side. We’re seeing some leveling off of housing construction.”
He noted that ADP also saws gains in retail employment last month for the holidays. However, both Macy’s and Kmart announced store closures Wednesday and Kohl’s reported disappointing sales, so there may be a drop in that sector as well this month. Still, the labor market is showing signs of tightening.
“Wage growth is picking up on queue as the labor market has come into full employment,” Zandi added.