Employment Data Gap Widens: December's 41,000 Rise Versus Broader Nonfarm Trends

The U.S. labor market continues to reveal diverging signals between different employment metrics. Recent analysis from Continuum Economics highlights how December’s ADP employment increase of 41,000 sets the stage for a broader examination of labor market dynamics across measurement methodologies.

Economists anticipate that early 2025 employment figures will underscore this measurement gap. While the nonfarm employment sector is expected to add approximately 85,000 jobs, ADP employment data is projected to rise by only 30,000 positions, representing a notable deceleration. This pattern reflects a consistent trend over the past six months, where ADP figures have underperformed nonfarm data by an average of 22,000 positions. December’s 41,000 ADP increase actually aligned more closely with nonfarm figures, but this convergence masks broader weakness.

The Divergence Pattern: Widening Gaps Across Data Sets

The expected gap between ADP and nonfarm employment is forecast to expand to approximately 50,000 in the coming period. While September and November showed narrower discrepancies, the divergence is expected to widen significantly. This 50,000-point gap represents one of the more pronounced separations observed in recent months, standing in sharp contrast to December’s 41,000 figure.

Sector-by-Sector Breakdown: Construction Leads, Services Stall

The employment slowdown reflects uneven sector performance. Goods-producing sectors, particularly construction, are anticipated to show modest improvements. Construction activity has demonstrated relative resilience compared to other employment segments. Conversely, the service sector—which has historically driven broader employment gains—is expected to experience deceleration.

Within service industries, the weakness is most pronounced in education and healthcare. These sectors have shown the most substantial discrepancies between ADP and nonfarm measurements, highlighting how different data methodologies capture employment trends differently. The retail sector’s recent softness contributes to nonfarm employment underperformance, though this weakness translates less dramatically into ADP readings.

What These Employment Shifts Mean

The growing gap between 41,000-level December performance and projected future divergences points to underlying complexity in the labor market. Different employment metrics are increasingly capturing distinct narratives about job creation, with service sector employment proving particularly difficult to measure consistently across methodologies. Understanding these divergences is crucial for policymakers and market participants seeking to gauge true economic momentum.