Private payrolls in the United States surged significantly in December 2023, exceeding expectations and concluding a robust year for the nation's job market, according to the latest report from ADP.

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LOS ANGELES, CALIFORNIA - JANUARY 03: A 'Join Our Team' sign is posted outside a coffee shop on January 03, 2024 in Los Angeles, California. U.S. job openings fell to 8.79 million in November, the lowest in over two years, according to the U.S. Labor Department.

Private Payrolls Experience a Notable Increase

According to CNBC's report, private payrolls recorded a notable increase of 164,000 in December, marking a substantial uptick from the revised figure of 101,000 in November. 

The performance surpassed the consensus estimate of 130,000 from the Dow Jones survey, reinforcing positive trends in the labor market as the year concluded.

The report also highlighted a decline in initial jobless claims for the final week of 2023, signifying the ongoing tightness of the labor market. The decreasing number of jobless claims suggests that companies are hesitant to initiate layoffs, further underlining the strength of the employment landscape.

Notably, the leisure and hospitality sector spearheaded the rebound, contributing significantly to job growth with the addition of 59,000 positions. This sector, encompassing hotels, restaurants, bars, and related establishments, demonstrated resilience after facing severe challenges in the early stages of the COVID-19 pandemic. 

The trend, which had seen a slowdown in recent months, experienced a revival. Moreover, the leisure and hospitality sector led in wage gains, boasting an annual growth rate of 6.4%.

The construction industry also played a substantial role, contributing 24,000 jobs to the overall tally. Meanwhile, the other services category, which includes businesses such as dry cleaning and support services, added 22,000 jobs, and financial activities surged by 18,000 positions.

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Recorded Declines

However, a few categories experienced declines during the month, with manufacturing witnessing a reduction of 13,000 jobs, while information services, natural resources, and mining both reported a decline of 2,000 jobs each.

The report highlighted the rate of earnings growth, indicating a slowdown. Those remaining in their current roles observed an annual pay rise of 5.4%, while individuals transitioning to new jobs experienced a more substantial increase, with earnings growing by 8%, as per ADP's findings. 

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