Private labor costs in the US will recover less than expected in November

U.S. private labor costs recovered less than expected in December, the ADP national employment report showed on Wednesday.Private employment increased by 41,000 jobs last month, after a revised decline of 29,000 in November. Economists polled by Reuters had forecast private employment to rise by 47,000 jobs, after a previously reported drop of 32,000 in November.

The ADP report was jointly developed with the Stanford Digital Economy Lab. It was released ahead of the Bureau of Labor Statistics’ more extensive and closely watched employment report for December on Friday.

The monthly estimate historically differs from private government payrolls in the employment report. While job growth has slowed significantly due to weak labor demand, layoffs remain relatively low by historical standards.

Economists say policy uncertainty, mainly linked to import tariffs, has made companies reluctant to expand their workforces. Some employers are also integrating artificial intelligence into certain positions, reducing the need for labor.

A Reuters survey of economists shows that private payrolls rose by 64,000 in December, after rising by 69,000 in November. With more government job losses expected, total nonfarm payrolls rose by an estimated 60,000 last month after rising by 64,000 in November.

But attention will likely turn to the unemployment rate, which is expected to have fallen to 4.5% after jumping to a four-year high of 4.6% in November. November’s unemployment rate was partially distorted by the 43-day federal government shutdown, which also prevented the collection of household data for October.

The unemployment rate for October was not published for the first time since the government began keeping the series in 1948.