Job Growth Turns Positive

According to ADP's report, private sector job creation turned positive in December 2025. Companies added 41,000 new hires, reversing the previous loss of 29,000 jobs in November.

This increase indicates a positive sign for the labor market as the year drew to a close.

Sector Contributions to Job Growth

The job growth in December was driven entirely by the services industries. The education and health-related sectors contributed significantly, adding 39,000 jobs. Leisure and hospitality also played a role, adding 24,000 positions.

Other sectors such as trade, transportation, and utilities gained 11,000 jobs, while financial services saw an increase of 6,000 jobs.

Losses in Other Sectors

Despite the overall job growth, some sectors faced losses. Professional and business services saw a decline of 29,000 jobs, and information services lost 12,000 jobs.

Additionally, goods-producing industries lost 3,000 jobs, primarily due to a decrease of 5,000 in the manufacturing sector.

Small Firms Lead Job Gains

Small firms, specifically those employing fewer than 500 workers, accounted for nearly all job gains in December.

These companies added 39,000 jobs, while larger firms only contributed 2,000 jobs. Nela Richardson, ADP's chief economist, stated that small establishments recovered from job losses in November with positive hiring at the end of the year.

Wage Growth Trends

Wage gains in December remained steady. Workers staying in their jobs experienced an average annual pay increase of 4.4%, which was unchanged from November.

Those who changed jobs saw a slightly better increase of 6.6%, up by 0.3 percentage points compared to the previous month.

Looking Ahead

This report comes just two days before the Bureau of Labor Statistics (BLS) releases its nonfarm payrolls count.

Economists expect that the BLS will report around 73,000 new jobs for December, an increase from 64,000 in November. The unemployment rate is projected to decrease slightly to 4.5%.