US private sector adds 41,000 jobs in December, ADP shows

Private sector job creation turned positive in December, though hiring came in slightly below expectations, according to data released Wednesday by payrolls processor ADP.

Companies added 41,000 jobs during the month, reversing a revised loss of 29,000 in November and offering a modest boost to confidence in a labour market that softened toward the end of 2025.

The result fell short of the Dow Jones consensus forecast for 48,000 new jobs.

Still, the December increase marked a clear improvement after private payrolls declined in three of the previous four months, underscoring tentative stabilisation following a period of uneven employment growth.

Services sector drives gains

All of December’s job growth came from services-producing industries, highlighting the continued divergence between services and goods-related sectors.

Education and health services led hiring with 39,000 new jobs, while leisure and hospitality added 24,000 positions as seasonal demand supported employment.

Trade, transportation, and utilities saw payrolls rise by 11,000, and financial services added 6,000 jobs.

These gains were partly offset by notable losses elsewhere in the services economy.

Professional and business services shed 29,000 jobs, while information services cut 12,000 positions, reflecting ongoing pressure in technology and related fields.

Goods-producing industries posted a net loss of 3,000 jobs, driven mainly by a decline of 5,000 in manufacturing employment, reinforcing signs of weakness in factory activity.

Small firms lead end-of-year hiring

Nearly all of December’s hiring came from smaller businesses.

Companies with fewer than 500 employees accounted for the bulk of new jobs, while large firms added just 2,000 positions.

“Small establishments recovered from November job losses with positive end-of-year hiring, even as large employers pulled back,” said Nela Richardson, ADP’s chief economist.

The November payroll figure was revised slightly from an initially reported loss of 32,000.

Wage growth remained steady but subdued. Workers who stayed in their jobs saw average annual pay rise 4.4%, unchanged from November.

Job changers recorded stronger gains of 6.6%, up 0.3 percentage points from the previous month.

Focus turns to official jobs data

The ADP report arrives two days ahead of the closely watched nonfarm payrolls release from the US Bureau of Labor Statistics.

Data collection for the government report had been disrupted by a recent shutdown, making Friday’s release the first on-time report since the impasse ended.

Economists surveyed by Dow Jones expect December payrolls to rise by 73,000, compared with 64,000 in November, with the unemployment rate edging down to 4.5%.

The Federal Reserve Bank of Chicago, however, estimates unemployment will hold at 4.6%, a four-year high.