ADP National Employment Report: 122K Private Jobs Added in December

by Jennifer Nash, 1/8/25

The economic mover and shaker this week is Friday's employment report from the Bureau of Labor Statistics. This monthly report contains a wealth of data for economists, the most publicized being the month-over-month change in Total Nonfarm Employment (the PAYEMS series in the FRED repository). However, each month a few days before we receive the highly anticipated jobs report, ADP releases their data on new nonfarm private jobs.

The ADP employment report revealed that 122,000 nonfarm private jobs were added in December, lower than the expected 139,000 addition. Private sector hiring has now slowed for six of the past eight months and December's reading marks the smallest addition since August.

The forecast for the forthcoming BLS report is that 130,000 private nonfarm jobs were added in December. However, the forecast for the full nonfarm jobs (the PAYEMS number) is for 154,000 jobs to have been added. Here is a visualization of the two series over the past twelve months.

Here is an excerpt from today's ADP report press release:

“The labor market downshifted to a more modest pace of growth in the final month of 2024, with a slowdown in both hiring and pay gains,” said Nela Richardson, chief economist, ADP. “Health care stood out in the second half of the year, creating more jobs than any other sector.”

Here is a snapshot of the monthly change in the ADP headline number since the company's earliest published data with the new methodology in 2010. This is quite a volatile series, so we've plotted the monthly data points as dots along with a six-month moving average, which gives us a clearer sense of the trend. The latest six-month moving average is 138,000, down from 143,000 in November. This is the lowest level since February 2024.

As we see in the chart above, the trend peaked in September 2015 and then went negative for the first time in late 2019, just before the NBER declared a recession start. The COVID-19 pandemic has brought employment numbers down to levels we have never seen this century. The trend reached a new high in 2021 at 778,000 and has recently dropped back to pre-pandemic levels.

ADP Employment: Industry

ADP also gives us a breakdown of Total Nonfarm Private Employment into two categories: Goods Producing and Service Providing. The US is predominantly a services economy, so it comes as no surprise that Services employment has shown stronger jobs growth. It makes sense that service-producing employment has plummeted during the pandemic for a couple of reasons - our economy is mostly supported by service-producing jobs, and during the pandemic, those same services were brought to a halt. In December, goods-producing jobs rose by 10,000 while service-providing jobs added 112,000.

The sector with the largest growth in December was Education and Health Services with a gain of 57,000. The biggest loser this month was Manufacturing with a loss of 11,000 jobs.

Here is the same chart style (as the one above) illustrating the two.

For a better sense of the components of the two Goods Producing and Service Providing cohorts, here is a year-over-year comparison snapshot of the select industries tracked by ADP making up the two groups.

ADP Nonfarm Private Employment Goods YoY

ADP Nonfarm Private Employment Services YoY

The next chart is a linear representation of each industry's contribution to overall employment from the start of the series.

ADP Employment: Region

ADP also gives us a breakdown of Total Nonfarm Private Employment into nine regions (census divisions). The region with the largest growth in December was the Pacific, with a gain of 56,000 private jobs. Meanwhile, the East North Central region experienced the largest loss (-2,000).

Here is a year-over-year comparison snapshot of the select census divisions tracked by ADP.

The next chart is a linear representation of each region's contribution to overall employment from the start of the series.

ADP Employment: Establishment Size

ADP also gives us a breakdown of Total Nonfarm Private Employment into five sizes. Establishments with 500+ employees saw the largest growth in December with a gain of 97,000 private jobs while those with 50-249 employees experienced a loss of 2,000 private jobs.