ADP Employment Report: +41,000, Mostly at Medium-Size Companies. Small Companies Had First Payroll Gain in 5 Months

Private-sector job growth slowed to a crawl in the second half.
By Wolf Richter for WOLF STREET.

Private-sector employers added 41,000 jobs to their payrolls in December, after the drop in November. Of that increase in payrolls, 34,000 occurred at employers with 50-499 employees. Small employers added 9,000 jobs, large employers added 2,000 jobs, according to the ADP National Employment Report today, based on data from companies whose payroll it processes.

The three-month average payroll increase (blue line in the chart), which had turned negative in November for the first time since August 2020, rose to about 20,000.

The declines in August and September were a result of the annual adjustment for the 12-month period through March 2025, applied to August and September, which turned those two months negative, from low-level growth before the adjustments were applied.

The decline in November may have been influenced by the uncertainties for companies around the government shutdown, to where some companies put hiring on hold until the dust settled down. With job creation lethargic, it doesn’t take much to turn low growth into a decline.

For the whole year 2025, private-sector payrolls rose by 614,000, the smallest annual gain since the job losses in 2020.

With the gains in December, payrolls rose to a record 134.59 million. The chart shows the trend: Private-sector job growth continued in 2025, but that growth was much slower than in prior years and slowed to a crawl in the second half.

Median wages increased year-over-year for:

“Job Stayers”: +4.4%.
“Job Changers”: +6.6%.

The wage data from ADP is based on a subset of 14.8 million workers employed for at least 12 months, whose paychecks ADP processed, and includes salary and hourly wages, overtime, tips, bonuses, and commissions.

Of that sample, over 13.8 million are job stayers, 39% of whom are salaried employees and 61% are hourly employees. And over 1 million are job changers.

ADP’s data only goes back to late 2020, so comparisons to periods before the pandemic are not possible.

Small companies with fewer than 50 workers added 9,000 workers in December, the first increase since July, bringing the total to 58.38 million workers.

From May through November, payrolls at these small companies had declined by 240,000. The next few months will show if the gain in December was actually a change of direction of that downtrend.

Medium-size companies with 50-499 workers added 34,000 jobs to their payrolls in December, the second increase in a row (November +45,000), after three months of declines, bringing the total to a record 51.23 million employees.

Larger companies with 500 and more employees added only 2,000 jobs in December, after the job gains in the prior six months (+264,000). Their payrolls rose to a record 24.89 million.

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WOLF STREET FEATURE: Daily Market Insights by Chris Vermeulen, Chief Investment Officer, TheTechnicalTraders.com.