The United States announced Thursday (5) the US ADP employment report known as “small nonfarm”. The market is strong.
Employment growth has been concentrated in firms with fewer than 500 employees. Large companies are cutting 151,000 workers, the most since April 2020. Leisure and catering, education and health services, professional and business services and construction have led to job growth.
The job market is strong but fragmented, with hiring varying by sector and company size, ADP chief economist Nela Richardson said in a statement. Business units that hired aggressively in the first half of last year slowed and in some cases cut jobs in the last month of the year.
ADP data suggests that the labor market, while cooling in some areas, remains strong. Despite fears of a looming recession, demand for labor far outstrips supply, putting upward pressure on wages and funding continued consumer spending. Layoffs remain extremely low and vacancies remain at an all-time high.
It is worth noting that the report also reviewed the wage growth situation of the month, which is the focus and concern of the Federal Reserve (Fed) in fighting inflation. Fed Chairman Jerome Powell identified wages as the main driver of price growth in services, excluding housing and energy, and the main factor influencing the overall inflation outlook.
In a positive sign for the Fed, ADP data showed a sharp deceleration in wage growth in December. Wages for those who switched jobs increased by 15.2%, the lowest in 10 months, while those who stayed at work saw an average annual increase in pay of 7.3%, down from 7, 6% in November.
