ADP National Employment Report: Private Sector Employment Increased by 235,000 Jobs in December; Annual Pay Up 7.3%

By Jessel Renolayan First Posted: Jan 08, 2023 07:42 PM EST

Private sector employment increased by 235,000 jobs in December and annual pay was up 7.3 percent year-over-year, according to the December ADP^® National Employment Report^TM produced by the ADP Research Institute^® in collaboration with the Stanford Digital Economy Lab ("Stanford Lab").

(Photo : ADP)

The jobs report and pay insights use ADP's fine-grained anonymized and aggregated payroll data of over 25 million U.S. employees to provide a representative picture of the labor market.

The report details the current month's total private employment change, and weekly job data from the previous month. ADP's pay measure uniquely captures the earnings of a cohort of almost 10 million employees over a 12-month period.

"The labor market is strong but fragmented, with hiring varying sharply by industry and establishment size," said Nela Richardson, chief economist, 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."

December 2022 Report Highlights*

View the ADP National Employment Report and interactive charts at www.adpemploymentreport.com.

Jobs Report

Private employers added 235,000 jobs in December
Job resurgence was seen in the last two months of 2022 led by consumer-facing service industries. Hiring was strong across small and medium establishments while large establishments saw a drop in employment of 151,000 jobs.

Change in U.S. Private Employment: 235,000

Change by Industry Sector

- Goods-producing: 22,000

Natural resources/mining -14,000
Construction 41,000
Manufacturing -5,000

- Service-providing: 213,000

Trade/transportation/utilities -24,000
Information 1,000
Financial activities -12,000
Professional/business services 52,000
Education/health services 42,000
Leisure/hospitality 123,000
Other services 31,000

Change by U.S. Regions

- Northeast: 54,000

New England 2,000
Middle Atlantic 52,000

- Midwest: 70,000

East North Central 61,000
West North Central 9,000

- South: 253,000

South Atlantic 165,000
East South Central 19,000
West South Central 69,000

- West: -142,000

Mountain -119,000
Pacific -23,000

Change by Establishment Size

- Small establishments: 195,000

1-19 employees 65,000
20-49 employees 130,000

- Medium establishments: 191,000

50-249 employees 159,000
250-499 employees 32,000

- Large establishments: -151,000

500+ employees -151,000

Pay Insights

December saw the lowest pay growth since March 2022
December ushered in the largest decline in pay growth for job stayers in the three-year series history. Leisure and hospitality; trade, transportation and utilities; and information sectors had the sharpest declines in pay gains. Job changers' pay growth also fell to the lowest level in 10 months.

Median Change in Annual Pay (ADP matched person sample)

- Job-Stayers 7.3%

- Job-Changers 15.2%

Median Change in Annual Pay for Job-Stayers by Industry Sector

- Goods-producing:

Natural resources/mining 7.8%
Construction 6.9%
Manufacturing 7.3%

- Service-providing:

Trade/transportation/utilities 7.5%
Information 7.0%
Financial activities 7.5%
Professional/business services 6.6%
Education/health services 7.0%
Leisure/hospitality 10.1%
Other services 6.7%

Median Change in Annual Pay for Job-Stayers by Firm Size

- Small firms:

1-19 employees 5.4%
20-49 employees 6.9%

- Medium firms:

50-249 employees 7.6%
250-499 employees 7.6%

- Large firms:

500+ employees 7.7%

To see Pay Insights by U.S. State, Gender, and Age for Job-Stayers, visit here:

* Sum of components may not equal total, due to rounding.

The historical data file, and weekly data for the previous month, is available at https://adpemploymentreport.com/.

To subscribe to monthly email alerts or obtain additional information about the ADP National Employment Report, including employment and pay data, interactive charts, methodology, and a calendar of release dates, please visit https://adpemploymentreport.com/.

The January 2023 ADP National Employment Report will be released at 8:15 a.m. ET on February 1, 2023.