December Private-Sector Employment Up 235,000; Initial Claims at 4-Month Low
Two reports on Thursday show a strong, resilient jobs market despite inflation concerns and volatile economic conditions.
ADP, Roseland, N.J., reported private-sector employment rose by 235,000 in December, while annual pay increased by more than 7 percent. And the Labor Department reported initial claims for unemployment insurance fell by 19,000 last week to its lowest level since September.
ADP said job resurgence materialized in the last two months of 2022, led by consumer-facing service industries. Hiring increased across small and medium establishments, while large establishments saw a drop in jobs.
“The labor market is strong but fragmented, with hiring varying sharply by industry and establishment size,” said Nela Richardson, chief economist with ADP. “Business segments that hired aggressively in the first half of 2022 have slowed hiring and in some cases cut jobs in the last month of the year.”
The report said by sector, goods-producing employers added 22,000 jobs in December, while the service sector added 213,000 jobs. Jobs in financial activities, however, fell by 12,000.
By region, the Northeast added 54,000 jobs; the Midwest, 70,000; and the South, 235,000, while the West saw a decline of 119,000 jobs.
By company size, small businesses (1-49 employees) added 195,000 jobs in December and medium-sized businesses (50-499) added 191,000 jobs, while large businesses lost 151,000 jobs.
The report also noted December saw the lowest pay growth since March 2022.
Meanwhile, the Labor Department said for the week ending December 31, the advance figure for seasonally adjusted initial claims fell to 204,000, a decrease of 19,000 from the previous week’s revised level to its lowest level since September. The four-week moving average fell to 213,750, a decrease of 6,750 from the previous week’s revised average.
The advance seasonally adjusted insured unemployment rate held at 1.2 percent for the week ending December 24, unchanged from the previous week’s unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending December 24 fell to 1,694,000, a decrease of 24,000 from the previous week’s revised level. The four-week moving average rose to 1,687,500, an increase of 6,000 from the previous week’s revised average.
The advance number of actual initial claims under state programs, unadjusted, totaled 275,552 in the week ending December 31, an increase of 5,703 (2.1 percent) from the previous week. The seasonal factors had expected an increase of 31,471 (11.7 percent) from the previous week. Labor reported 315,753 initial claims in the comparable week in 2022.
The advance unadjusted insured unemployment rate rose to 1.2 percent during the week ending December 24, an increase of 0.1 percentage point from the prior week. The advance unadjusted level of insured unemployment in state programs totaled 1,707,197, an increase of 130,459 (8.3 percent) from the preceding week. The seasonal factors had expected an increase of 154,582 (9.8 percent) from the previous week. A year earlier the rate was 1.4 percent; volume was 1,869,759.
The total number of continued weeks claimed for benefits in all programs for the week ending December 17 fell to 1,601,289, a decrease of 18,444 from the previous week. Labor reported 1,913,405 weekly claims filed for benefits in all programs in the comparable week in 2021.
On Friday, the Bureau of Labor Statistics issues its December Employment report. Mortgage Bankers Association Chief Economist Mike Fratantoni will provide commentary and analysis on Friday’s jobs report in the Monday, Jan. 9 edition of MBA NewsLink.
