Private sector employment increased by 40,000 in December, according to figures released by payroll processor ADP.

Small businesses with between one and 49 employees added 66,000 jobs in December, while midsized business with between 50 and 499 employees added 9,000 jobs. However, large businesses with more than 499 employees cut their payrolls by 35,000 employees.

The goods-producing sector saw a loss of 31,000 jobs, while the service-providing sector experienced a gain of 71,000 jobs. The manufacturing industry, however, lost 16,000 jobs.

Residential construction and financial activities related to home sales and mortgage lending were hit especially hard. In December, construction employment fell 17,000, the thirteenth consecutive monthly decline, bringing the total decline in construction jobs since August 2006 to 199,000. Employment in financial activities fell 5,000, the third decline in the past five months.

The Labor Department reported a smaller gain in December of just 18,000 jobs, the smallest increase in payrolls since August 2003, after a gain of 115,000 new jobs in November.

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