U.S. private employers added 41,000 jobs in December, returning to growth after a contraction in November, according to the ADP National Employment Report released Wednesday.
The report, produced by the ADP Research Institute in collaboration with the Stanford Digital Economy Lab, signals a labor market that is cooling but remains resilient as the year concludes. The December figures mark a rebound from November, which saw a revised loss of 29,000 jobs — an improvement from the initially reported decline of 32,000.
While the return to positive hiring is a welcome sign, the modest pace of growth suggests a mixed economic landscape. The services sector shouldered the bulk of the gains, effectively countering weakness in other parts of the economy — a finding echoed by recent comments from Philadelphia Fed President Anna Paulson.
Services sector and small businesses lead recovery
Hiring activity in December was heavily tilted towards services. The education and health services sectors added 39,000 roles, representing the highest sector-specific gains. Leisure and hospitality also continued to grow, albeit more modestly, adding 24,000 positions during the month.
Conversely, the professional and business services sector remained a weak spot, shedding 29,000 jobs, while the information sector also struggled, losing 12,000 positions. These declines suggest that white-collar and corporate support roles are bearing the brunt of corporate cost-cutting measures and AI-related disruption.
The report also highlighted a turnaround for small businesses, which added 9,000 jobs in December. Defined as those with fewer than 50 employees, small businesses had previously shed 120,000 positions in November, according to ADP data.
“Small establishments recovered from November job losses with positive end-of-year hiring, even as large employers pulled back,” ADP Chief Economist Nela Richardson noted in a press release.
Wage dynamics showed signs of stabilization at the end of 2025. Annual pay growth for workers who stayed in their current jobs held steady at 4.4%, per ADP. However, workers who switched jobs saw their pay gains accelerate to 6.6%, indicating that employers are still offering premium pay to attract talent in specific, high-demand roles despite the overall slowing of headcount growth.
