US private-sector employment shrank in December for the first time in 8 months, ADP says – Business Insider – Business Insider

• The US lost 123,000 private payrolls in December, according to ADP’s monthly employment report.
• The reading marks the first contraction in nationwide hiring since April.
• Economists surveyed by Bloomberg expected an increase of roughly 75,000 payrolls.
• ADP’s report precedes the US Bureau of Labor Statistics’ monthly nonfarm payrolls data set for Friday release. The government report is expected to show a mild increase of 50,000 payrolls.
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Employment shrank in December for the first time in eight months as stricter COVID-19 lockdown measures cut into economic growth.

The country’s private sector shed 123,000 payrolls last month, according to the ADP monthly employment report published Wednesday morning. Economists surveyed by Bloomberg expected an increase of 75,000 payrolls. The decline is the first seen since the coronavirus pandemic slammed hiring activity in early 2020.

The reading also lands below the revised 304,000 total for November. The labor market’s recovery weakened through the end of 2020 as COVID-19 cases surged higher and prompted state and local governments to reinstate economic restrictions.

Losses were concentrated in the leisure and retail sectors, while the US construction industry was fairly insulated from the shock. Small businesses accounted for roughly 13,000 of the lost payrolls. Medium businesses added 37,000 new jobs and large firms lost 147,000 payrolls. 

Read more: 10 top Wall Street experts unveil their stock-market forecasts for 2021 — and tell you where to put your money

The Bureau of Labor Statistics’ monthly report is expected to further detail a December drop in hiring when it’s published on Friday. Economists expect payroll additions to come in at 50,000, though some are bracing for a decline.

While COVID-19 vaccines are expected to lift the US economy from its nearly year-long slump, case counts remain at elevated levels. The country reported 214,378 new cases on Tuesday, according to The COVID Tracking Project. Deaths neared 350,000 and hospitalizations climbed to 131,195.

Still, the government’s $900 billion stimulus package could protect against even larger losses. The deal, signed by President Donald Trump on December 27, includes relief for small businesses, boosted unemployment benefits, and $600 direct payments.

Read more: Fundstrat’s Tom Lee says to buy these 10 transportation stocks that were the hardest hit by the pandemic and are most leveraged for the economy’s reopening in 2021

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