Thursday brought more robust jobs data out of the US economy, underscoring the Fed’s uphill battle to balance an overheating labor market.

Private sector employers added 235,000 jobs last month, ADP said. That was far more than economists expected. Consensus was 150,000. The range of estimates was 100,000 to 280,000.

Although ADP hasn’t been the best predictor of the government’s jobs report, any incremental evidence that the labor market remains “too” hot supports the Fed’s inclinations to hawkishness.

The figures came a day after the latest JOLTS report suggested job openings remained extraordinarily elevated at the end of November, casting more doubt on a soft landing narrative that depends almost entirely on the idea that “excess” openings can do the heavy lifting when it comes to balancing worker demand and supply.

ADP’s numbers showed hiring was robust across small- and mid-sized companies, while large firms shed 151,000 positions. “The labor market is strong but fragmented, with hiring varying sharply by industry and establishment size,” Nela Richardson, ADP’s chief economist, remarked.

In goods, manufacturing payrolls shrank, as did natural resources and mining jobs, while construction added 14,000 positions. On the services side, leisure and hospitality led the way with a 123,000-job addition.

ADP’s new “pay insights” suggested leisure and hospitality wage growth remained in the double-digits last month, albeit just barely. At 10.1%, the 12-month rate exceeded that for any other industry by a mile, just as it has since mid-2021. The peak was 16.9% in March.

Economy-wide, pay growth for job switchers remained far above that for so-called “stayers” (15.2% versus 7.3%). That’s conducive to labor churn, and helps explain why millions of Americans continue to quit their jobs every month. Wednesday’s JOLTS figures showed the quit rate rose in November for the first time in nine months. Although wage growth may be moderating, it’s not near enough to pacify policymakers harboring unspoken wage-price spiral worries.

“Business segments that hired aggressively in the first half of 2022 have slowed hiring and in some cases cut jobs in the last month of the year,” Richardson went on to say Thursday, adding some nuance to the otherwise blistering headline.

Meanwhile, jobless claims dropped 19,000 to just 204,000 last week. That was well below the 225,000 consensus expected. Continuing claims, which have risen of late, likewise printed below estimates.

Bottom line: There was no evidence on Thursday to support the notion that the US labor market is cooling. Good news is bad news, so it was left to Friday’s NFP report to disappoint and thereby cheer investors unnerved by ongoing hawkish banter from this week’s Fed speakers.