On the eve of the release of the December non-farm payroll data, the ADP data, known as the &#34;little non-farm,&#34; unexpectedly slowed significantly, reaching its lowest level since August, indicating that there are still many uncertainties in the U.S. labor market.
On January 8, data released by the ADP Research Institute in collaboration with the Stanford Digital Economy Lab showed that U.S. ADP employment increased by 122,000 in December, below the expected 140,000 and the previous value of 146,000.
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ADP Chief Economist Nela Richardson stated:
<blockquote>
“The labor market has slowed to a more moderate growth rate in the last month of 2024, with hiring and wage increases both easing.”
</blockquote>
Analysts believe that the ADP data indicates a gradual weakening of the U.S. labor market in 2024, continuing until the end of the year. Federal Reserve officials must balance this trend with renewed inflation concerns when deciding on the interest rate cut path for 2025 and beyond.
After the data was released, the U.S. dollar index fluctuated slightly, currently reported at 109.20. U.S. stock futures showed little short-term fluctuation, with the Nasdaq 100 index futures maintaining a decline of about 0.1%.
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The yield on the U.S. 10-year Treasury bond fluctuated slightly, currently reported at 4.722%. Spot gold showed little short-term fluctuation, currently reported at $2,657.24 per ounce.
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<h2>Employment growth across industries shows mixed results, wage growth further cools</h2>
The report shows mixed results for employment growth across industries. The largest increases were seen in education and health services, construction, and leisure and hospitality. Employment numbers in manufacturing, natural resources and mining, and professional and business services saw declines.
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Wage growth further cooled. Workers changing jobs saw a wage increase of 7.1%, while wages for those staying in their jobs grew by 4.6%, the lowest level since mid-2021.
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Regionally, the West was the biggest driver of employment growth across regions. The vast majority of last month's employment growth came from companies with at least 500 employees
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On the same day, data released by the U.S. Department of Labor showed that the number of initial jobless claims in the U.S. for the week ending January 4 was 201,000, the lowest level since February. Meanwhile, the number of continuing claims rose to 1.87 million in the previous week.
Shortly before the data was released, Federal Reserve Governor Waller expressed support for further interest rate cuts, stating that the pace of rate cuts depends on the progress of inflation and the labor market. Waller stated:
<blockquote>
“The labor market is now close to the Federal Reserve's maximum employment goal, with no signs that the labor market will significantly weaken anytime soon. It is expected that tariffs will not have a significant impact on inflation. If the outlook meets expectations, it will support rate cuts in 2025.”
</blockquote>

The ADP data, known as the "little non-farm" report, unexpectedly slowed significantly in December, reaching its lowest level since August. The largest increases were seen in education and health services, construction, and the leisure and hospitality sectors. Employment in manufacturing, natural resources and mining, as well as professional and business services saw a decline

- The ADP employment report for December shows an increase of 122,000 jobs, below the expected 140,000, indicating uncertainty in the U.S. labor market.  
- ADP's chief economist noted a slowdown in hiring and wage growth, with the labor market showing signs of fatigue as 2024 ends.  
- The report highlights mixed employment growth across sectors, with significant increases in education, health services, and construction, while wage growth has cooled to its lowest levels since mid-2021.

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In December, the ADP employment figure in the United States unexpectedly slowed significantly to 122,000, the lowest level since August