ADP’s Employment Report showed that private payrolls began 2024 slower than expected, as employers added just 107,000 new jobs in January. Most of the growth came in service-providing industries (+77K), with goods-producers adding the rest.
Annual pay for job stayers increased by 5.2% while job changers saw an average increase of 7.2%, though these figures have cooled considerably from recent highs. In addition, the difference between pay growth for job stayers versus job changers has also shrunk substantially, indicating there’s less incentive for switching jobs.
What’s the bottom line? Nela Richardson, chief economist for ADP, said, “Progress on inflation has brightened the economic picture despite a slowdown in hiring and pay.” She also noted that “wages adjusted for inflation have improved over the past six months, and the economy looks like it’s headed toward a soft landing in the U.S. and globally.”