Alicia Levine, head of equities at BNY Mellon Wealth Management, and Mike Green, chief strategist at Simplify Asset Management, discuss whether the Fed's inflation strategy is making money.
U.S. corporate hiring rose more than expected in December as the labor market remained resilient despite higher interest rates, according to the ADP National Employment Report released Thursday morning.
Companies added 164,000 jobs last month, exceeding the 115,000 gain forecast by Refinitiv. It's the best month for job creation since August.
The stronger-than-expected report follows an aggressive tightening campaign by the Federal Reserve, which has raised interest rates to their highest level since 2001. But policymakers have signaled in recent weeks that they are done with raising interest rates amid signs that inflation is finally easing and the economy is beginning to slow.
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Workers replace power lines in Monterey Park, California, on October 6. (FREDERIC J. BROWN/AFP via Getty Images / Getty Images)
In a welcome sign for the Fed, wage growth slowed further in November.
According to the report, annual wages rose 5.4% last month, marking the 15th straight month of slowing growth. For workers who changed jobs, wages rose 8%, compared to 8.3% the previous month.
“We are returning to a labor market that is largely in line with pre-pandemic hiring,” said Nela Richardson, chief economist at ADP. “While wages have not driven the recent surge in inflation, with the decline in wage growth the risk of a wage-price spiral has all but disappeared.”
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The leisure and hospitality industry saw the largest employment gain last month with 59,000 new employees. But there were also notable increases in other sectors, including education and healthcare, financial activities and construction.
Educators gather during a hiring event for the Prince George's County School District on Aug. 2 at Dr. Henry A. Wise Jr. High School in Upper Marlboro, Maryland, to speak with potential recruits. (Amanda Andrade-Rhoades/For The Washington Post via Getty Images / Getty Images)
The gains helped offset job losses in the manufacturing, natural resources and mining and information sectors.
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The data comes ahead of the release Friday morning of the Labor Department's more closely watched December jobs report, which showed employers added 170,000 workers, following a gain of 199,000 in November. The unemployment rate is expected to rise slightly to 3.8%.
ADP figures can vary dramatically from official government figures and have historically been an unreliable indicator of the future.