ADP Reports Increased Private Sector Employment and Compensation Gains in December

According to the ADP® National Employment Report™ released on Thursday (1-4-24), nonfarm private sector employment increased by 164,000 jobs in December and annual pay was up 5.4% year-over-year.

The ADP National Employment Report is produced by the ADP Research Institute® in collaboration with Stanford Digital Economy Lab (“Stanford Lab”). The report is an independent measure and high-frequency view of the private sector labor market based on actual, anonymized payroll data of more than 25 million US employees. The report details the current month’s total private employment change and weekly job data from the previous month. Because the underlying ADP payroll databases are continuously updated, the report provides near real-time measure of US employment. This measure reflects the number of employees on ADP client payrolls (Payroll Employment) to provide a richer understanding of the labor market. ADP’s pay measure uniquely captures the earning of a cohort of almost 10 million employes over a 12-month period.

Commenting on the results of the December report, Nela Richardson, ADP’s chief economist, said:

“We’re returning to a labor market that’s very much aligned with pre-pandemic hiring. While wages didn’t drive the recent bout of inflation, now that pay growth has retreated, any risk of a wage-price spiral has all but disappeared.”