U.S. Job Growth Falters as Labor Market Faces Challenges

U.S. private payrolls saw modest growth in December, adding 41,000 jobs after a decline in November. While the services sector led the rebound, losses persisted in professional, business, and manufacturing roles. Economists highlight policy uncertainty and AI adoption as factors impacting labor demand.

In December, U.S. private payrolls experienced limited growth, increasing by just 41,000 jobs, following November's revised 29,000-job decrease, according to ADP's national employment report released on Wednesday.

The services sector spearheaded the rebound, adding 44,000 positions. However, the professional and business services industry faced a significant setback with the loss of 29,000 jobs, and the information sector contracted by 12,000 positions. Meanwhile, the goods-producing sector saw a decline of 3,000 jobs, with manufacturing shedding 5,000 roles.

Economists attributed the sluggish job growth to policy uncertainties and the integration of artificial intelligence, which reduces labor demand. Additionally, attention remains focused on the unemployment rate, projected to decrease slightly to 4.5% after a spike to 4.6% in November, partly due to the 43-day federal government shutdown.

(With inputs from agencies.)