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Numbers: Private sector employers cut 123,000 jobs in December, the first drop since April, according to the ADP national employment report reported Wednesday.
Economists surveyed by MarketWatch expected a gain of 60,000 private sector jobs in December.
What happened: The job losses were mainly concentrated in retail trade and recreation and hospitality.
Private sector service providers reduced 105,000 jobs in December. During that time, goods producers lost 18,000 jobs. Manufacturing lost 21,000 jobs.
By business size, small businesses lost 37,000 private sector jobs in December and large businesses lost 147,000. Mid-sized businesses, defined as businesses with 50 to 499 employees, created 37,000 jobs.
Big picture: Economists are using ADP data as a guide for the Labor Ministry’s employment report, which will be released on Friday and which covers government jobs in addition to the private sector.
Economists polled by MarketWatch expect the government report to show slower job growth in December, with non-farm employment only increasing by 50,000 last month.
Only a handful of economists predicted a drop in paid employment in December ahead of the ADP report.
Economists are increasingly worried about the health of the labor market. Leading researchers at the American Economic Association’s annual meeting this week warned of the possibility of a jobless recovery after the pandemic.
Market reaction: Tech stocks were scheduled to open lower on Wednesday after Democrats won at least one seat in the U.S. Senate in the second round of elections in Georgia. The Nasdaq COMP composite index,
won 120.51 points on Tuesday.
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