Private Sector Employment Recovers in December, Yet Job Market Remains Weak

Private Sector Employment Sees Modest Recovery in December

According to a widely monitored employment indicator, U.S. private sector hiring bounced back in December, though job creation remained below levels typically seen in a robust labor market.

The latest ADP National Employment Report revealed that private employers added 41,000 jobs in December 2025, reversing a revised loss of 29,000 positions from November. However, this increase was less than the 47,000 jobs economists had anticipated.

Nela Richardson, ADP’s chief economist, noted, “Small businesses managed to recover from November’s job losses with positive hiring at year-end, even as larger companies scaled back.” This highlights a widening gap in hiring trends between companies of different sizes.

Breakdown of Job Gains by Industry

Nearly all of December’s job growth came from service-related sectors, which added 44,000 positions. Education and health services led the way with 39,000 new jobs, while leisure and hospitality contributed 24,000.

Trade, transportation, and utilities increased their workforce by 11,000. In contrast, professional and business services cut 29,000 jobs, and the information sector reduced headcount by 12,000.

Goods-producing industries experienced a net loss of 3,000 jobs, primarily due to a 5,000-job decline in manufacturing. These losses offset modest gains in construction and natural resources.

Regional and Business Size Trends

• South: Added 54,000 jobs
• Northeast: Gained 40,000 jobs, with a strong recovery in the Mid-Atlantic
• Midwest: Saw a modest increase of 9,000 jobs
• West: Lost 61,000 jobs, with the Pacific region accounting for most of the decline

Medium-sized companies led hiring efforts in December, bringing on 34,000 new employees. Small businesses added 9,000 jobs, while large firms contributed just 2,000, reflecting a slowdown among major employers as the year ended.

Wage Growth Remains Steady

Wage increases showed little sign of slowing. Pay for employees who stayed in their jobs rose 4.4% year-over-year in December. Those who switched jobs saw their wages climb by 6.6%, up from 6.3% in November.

Wall Street Eyes Further Gains

Markets Respond to Mixed Employment Data

U.S. stock futures inched higher on Wednesday morning as investors assessed the latest employment figures.

• S&P 500 futures rose 0.1%
• Dow futures climbed 0.3%, extending record highs from the previous session
• Nasdaq 100 futures remained near unchanged

Moody’s Corp. led premarket activity, gaining 3% after strong performance earlier in the week. Analysts attributed the rise to expectations of increased debt issuance in 2026.

Commodities Update

• Silver futures dropped 4% to $77 after briefly surpassing $80 on Tuesday
• Gold futures declined 1.1%
• Crude oil prices remained steady around $57 per barrel

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