"Small Non-Farm" employment figures fall short of expectations, indicating a continued trend of labor market weakness!
The U.S. ADP employment figures for December increased by only 122,000, far below the expected 140,000, marking the lowest in four months. This "small non-farm" data missed expectations, showing that the trend of a gradually weakening labor market in the U.S. has continued into the end of 2024.
By industry, the largest increases were seen in education and healthcare services, construction, and the leisure and hospitality sectors, while employment numbers in manufacturing, natural resources and mining, and professional and business services decreased. Wage growth also further cooled, with job switchers seeing a wage increase of 7.1%, and non-switchers seeing a wage increase of 4.6%, the slowest growth rate since mid-2021.
Federal Reserve officials need to balance this trend with inflation concerns when deciding on the interest rate path for 2025 and beyond.