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Private sector companies added 122,000 jobs in December, less than expected, ADP says

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A worker adjusts hiring signage at a job and resource fair hosted by the Mountain Area Workforce Development Board in partnership with NCWorks in Hendersonville, North Carolina, US, on Tuesday, Nov. 19, 2024. 

Allison Joyce | Bloomberg | Getty Images

Private sector job creation eased more than expected in December while wages grew at the slowest pace in nearly three-and-a-half years, payment processing firm ADP reported Wednesday.

Companies added a seasonally adjusted 122,000 jobs for the month, down from 146,000 additions in November and less than the Dow Jones consensus forecast for 136,000. It was the smallest increase since August.

On wages, pay grew at a 4.6% rate from a year ago, the slowest pace since July 2021.

“The labor market downshifted to a more modest pace of growth in the final month of 2024, with a slowdown in both hiring and pay gains,” ADP chief economist Nela Richardson said.

Though there are signs hiring is slowing, there have been few indications to indicate that layoffs are increasing.

The Labor Department on Wednesday reported that initial claims for unemployment insurance totaled just 201,000 for the week ending Jan. 4. That was well below the 215,000 estimate and the lowest level since February 2024.

The reports come two days ahead of the closely watched nonfarm payrolls count from the Bureau of Labor Statistics. Economists polled by Dow Jones expect that report to show a gain of 155,000, which in itself would mark a sharp slowdown from November’s unexpectedly strong 227,000. The ADP and BLS numbers often differ, sometimes by large margins.

Federal Reserve policymakers are watching the jobs numbers closely as they plot their next moves for monetary policy. While most Fed officials have said they believe the labor market is solid, they are looking to keep interest rates less restrictive so as not to threaten job creation.

They also have expressed more confidence that inflation has stabilized though it is still above the Fed’s 2% target. The ADP numbers could add to the case that wages aren’t pressuring inflation.

From a sector standpoint, job creation was strongest in the education and health services category, which added 57,000 positions. Other significant gains came in construction (27,000), leisure and hospitality (22,000) and financial activities (12,000).

Several sectors reported job losses, including manufacturing (-11,000), natural resources and mining (-6,000) and professional and business services (-5,000).

Almost all of the jobs came from big companies with more than 500 workers, which amounted to 97,000.

Economics

Why the president must not be lexicographer-in-chief

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Who decides what legal terms mean? If it is Donald Trump, God help America

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Economics

Inflation rate slipped to 2.1% in April, lower than expected, Fed’s preferred gauge shows

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Inflation rate slipped to 2.1% in April, lower than expected, Fed’s preferred gauge shows

Inflation barely budged in April as tariffs President Donald Trump implemented in the early part of the month had yet to show up in consumer prices, the Commerce Department reported Friday.

The personal consumption expenditures price index, the Federal Reserve’s key inflation measure, increased just 0.1% for the month, putting the annual inflation rate at 2.1%. The monthly reading was in line with the Dow Jones consensus forecast while the annual level was 0.1 percentage point lower.

Excluding food and energy, the core reading that tends to get even greater focus from Fed policymakers showed readings of 0.1% and 2.5%, against respective estimates of 0.1% and 2.6%.

Consumer spending, though, slowed sharply for the month, posting just a 0.2% increase, in line with the consensus but slower than the 0.7% rate in March. A more cautious consumer mood also was reflected in the personal savings rate, which jumped to 4.9%, up from 0.6 percentage point in March to the highest level in nearly a year.

Personal income surged 0.8%, a slight increase from the prior month but well ahead of the forecast for 0.3%.

Markets showed little reaction to the news, with stock futures continuing to point lower and Treasury yields mixed.

People shop at a grocery store in Brooklyn on May 13, 2025 in New York City.

Spencer Platt | Getty Images

Trump has been pushing the Fed to lower its key interest rate as inflation has continued to gravitate back to the central bank’s 2% target. However, policymakers have been hesitant to move as they await the longer-term impacts of the president’s trade policy.

On Thursday, Trump and Fed Chair Jerome Powell held their first face-to-face meeting since the president started his second term. However, a Fed statement indicated the future path of monetary policy was not discussed and stressed that decisions would be made free of political considerations.

Trump slapped across-the-board 10% duties on all U.S. imports, part of an effort to even out a trading landscape in which the U.S. ran a record $140.5 billion deficit in March. In addition to the general tariffs, Trump launched selective reciprocal tariffs much higher than the 10% general charge.

Since then, though, Trump has backed off the more severe tariffs in favor of a 90-day negotiating period with the affected countries. Earlier this week, an international court struck down the tariffs, saying Trump exceeded his authority and didn’t prove that national security was threatened by the trade issues.

Then in the latest installment of the drama, an appeals court allowed a White House effort for a temporary stay of the order from the U.S. Court of International Trade.

Economists worry that tariffs could spark another round of inflation, though the historical record shows that their impact is often minimal.

At their policy meeting earlier this month, Fed officials also expressed worry about potential tariff inflation, particularly at a time when concerns are rising about the labor market. Higher prices and slower economic growth can yield stagflation, a phenomenon the U.S. hasn’t seen since the early 1980s.

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German inflation May 2025

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19 May 2025, Berlin: Apricots are sold at a greengrocer for 7.98 euros per kilogram. Grapes and papaya are also on offer.

Photo by Jens Kalaene/picture alliance via Getty Images

Germany’s annual inflation hit 2.1% in May approaching the European Central Bank’s 2% target but coming in slightly hotter than analyst estimates, preliminary data from statistics office Destatis showed Friday.

The print compares with a 2.2% reading in April and with a Reuters projection of 2%.

The print is harmonized across the euro zone for comparability.

So-called core inflation, which strips out more volatile food and energy prices, dipped slightly from April’s 2.8% to 2.9% in May. The closely watched services print meanwhile eased sharply, coming in at 3.4% compared to 3.9% in the previous month.

Energy prices fell markedly for the second month in a row, tumbling by 4.6% in May.

Germany’s consumer price index has been closing in on the European Central Bank’s 2% target over recent months, in a positive signal amid ongoing uncertainty about the economic outlook for Europe’s largest economy.

Domestic and global issues have mired expectations for Germany’s financial future.

One the one hand, U.S. President Donald Trump’s tariffs could damage economic growth, given Germany’s status as an export-reliant country, though the potential impact of such duties on inflation remains unclear. But frequent policy shifts and developments have been muddying the picture.

On the other hand, Germany’s newly minted government is starting to get to work and has made the economy a top priority. Questions linger about when and to what extent the new Berlin administration’s policy plans might be realized.

The ECB is set to make its next interest rate decision on June 5, with traders last pricing in an over 96% chance of a quarter point interest rate reduction, according to LSEG data. Back in April, the central bank had cut its deposit facility rate by 25 basis points to 2.25%.

This is a breaking news story, please check back for updates.

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