By Xavier Fontdegloria

Hiring among private-sector employers in the U.S. accelerated in December, a sign of a resilient job market despite continued interest-rate increases.

Employment in the nonfarm private sector increased by 235,000 in December from a 127,000 gain in November, data from the ADP National Employment Report showed Thursday.

Economists polled by The Wall Street Journal expected a rise of 153,000 jobs.

The labor market is strong but also fragmented, with hiring varying sharply by industry and establishment size, said Nela Richardson, chief economist at ADP. "Business segments that hired aggressively in the first half of 2022 have slowed hiring and in some cases cut jobs in the last month of the year," she said.

The ADP estimate is based on aggregated payroll data of more than 25 million U.S. workers and is independent from the Labor Department official data. The ADP series can diverge considerably from the Labor Department's data.

Small and medium-sized businesses led job gains in December, adding 195,000 and 191,000 jobs over the month. However, large businesses shed 151,000 jobs.

By sector, services providers continued to hire at a strong pace, particularly in the leisure and hospitality sector, which created 123,000 jobs.

"Job resurgence was seen in the last two months of 2022 led by consumer-facing service industries," Ms. Richardson said.

Goods producers also added jobs, driven by 55,000 more payrolls in the construction sector. Manufacturing lost 5,000 jobs.

Annual pay growth continued to slow in December. Pay rose 7.3% in December, down from the 7.6% on-year increase in November, and the lowest growth since March. Pay data is based on the salaries of almost 10 million individual employees over a 12-month period.

The U.S. Labor Department is expected to release its December employment report on Friday. Economists polled by The Wall Street Journal expect nonfarm payrolls to increase by 200,000, and the unemployment is forecast to remain at 3.7%.

Write to Xavier Fontdegloria at xavier.fontdegloria@wsj.com

(END) Dow Jones Newswires

January 05, 2023 08:46 ET (13:46 GMT)

Copyright (c) 2023 Dow Jones & Company, Inc.
Automatic Data Processing (NASDAQ:ADP)
Historical Stock Chart
From Apr 2023 to May 2023 Click Here for more Automatic Data Processing Charts.
Automatic Data Processing (NASDAQ:ADP)
Historical Stock Chart
From May 2022 to May 2023 Click Here for more Automatic Data Processing Charts.