One month after ADP reported a dismal -29K private payrolls print for November, tied for the worst month since March 2023, and just in time to validate the Fed's latest rate cut, moments ago ADP reported that in December, the US added 41K payrolls, which while a solid jump from last month's -29K, missed consensus estimates of a +50K print. 

The breakdown showed continued weakness in manufacturing jobs, which shrank by 3K in December, offset by a 44K increase in Service jobs, despite another notable drop in Information (-12K) and Professional/Business services (-29K) jobs. Also notable is that all the weakness was in the Western region (read California) where 61K jobs were lost, while a breakdown of establishments by size saw solid hiring by small and medium companies, offset by a modest 2K increase amid Large companies.

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

There was more good news for the Trump admin which appears to have halted the sharp deterioration in the labor market: year-over-year pay for job-stayers rose 4.4% in December, unchanged from November while jobchangers saw their pay growth accelerate to 6.6% from 6.3%.