The nation’s largest payroll service firm released its monthly analysis of private-sector hiring, and the figures might foreshadow a good start to 2012. ADP’s monthly employment report doesn’t have a great track record for predicting the official monthly jobs figures from the Department of Labor, but the high level of new jobs makes it almost a cinch that tomorrow’s unemployment report will echo the good news:
ADP today reported that employment in the U.S. nonfarm private business sector increased by 325,000 from November to December on a seasonally adjusted basis. The estimated advance in employment from October to November was revised down slightly to 204,000 from the initially reported 206,000. …
Employment in the private, service-providing sector rose 273,000 in December, which is up from an increase of 176,000 in November. Employment in the private, goods-producing sector increased 52,000 in December, while manufacturing employment increased 22,000.
Employment on large payrolls—those with 500 or more workers—increased 37,000, and employment on medium payrolls—those with 50 to 499 workers—rose 140,000 in December. Employment on small payrolls—those with up to 49 workers—rose 148,000 that same period, up from the 109,000 jobs created among small businesses last month. Of the 148,000 jobs created by small businesses, 18,000 jobs were created by the goods-producing sector and 130,000 jobs were created by the service-producing sector.
How close was ADP in predicting November’s numbers? Er … not as good as ADP projected. In fact, it was almost half of ADP’s projection at 120,000, about the rate needed to keep up with population growth. ADP has a track record of overshooting the mark, but it’s usually good at picking up on trends. I’d guess that this means a better December, even seasonally adjusted, than November.
The weekly jobless claim figure released today continues to show stability in the 370K-380K range:
In the week ending December 31, the advance figure for seasonally adjusted initial claims was 372,000, a decrease of 15,000 from the previous week’s revised figure of 387,000. The 4-week moving average was 373,250, a decrease of 3,250 from the previous week’s revised average of 376,500.
The advance seasonally adjusted insured unemployment rate was 2.8 percent for the week ending December 24, a decrease of 0.1 percentage point from the prior week’s unrevised rate.
The advance number for seasonally adjusted insured unemployment during the week ending December 24, was 3,595,000, a decrease of 22,000 from the preceding week’s revised level of 3,617,000. The 4-week moving average was 3,601,750, a decrease of 1,000 from the preceding week’s revised average of 3,602,750.
Thanks to the need to estimate nine states in a holiday week last Thursday, the figure from last week got adjusted upward by 6,000. I would suspect that we’ll see something similar next week, too, so this may bump up a bit at that time. However, that’s not out of the normal range for restatements, and the initial figure today is consistent with the job-loss environment of the last few weeks. That’s one reason why I think that December will be better than November, but not dramatically improved — perhaps around 150-170K jobs added.
According to an oddly jubilant Reuters, that’s about what they think as well:
The news is all good for the jobs market so far in 2012: Separate reports Thursday showed a surge in private-sector job creation, a sharp drop in weekly unemployment claims and planned layoffs at their lowest level in six months. …
The reports come a day ahead of the Labor Department’s monthly report expected to show 150,000 total jobs created in the public and private sectors.
In a related report, the number of planned layoffs at U.S. firms declined to its lowest level since June, suggesting ongoing improvement in the labor market although unemployment remains historically high, a report on Thursday showed.
Employers announced 41,785 planned job cutslast month, down 1.6 percent from 42,474 in November, according to the report from consultants Challenger, Gray & Christmas.
But December’s job cuts were up from the same time a year ago, rising 31 percent from the 32,004 job cuts announced in December 2010. For all of 2011, employers announced 606,082 cuts, up 14 percent from the 529,973 layoffs in 2010.
Well, the addition of 150,000 jobs isn’t bad news from the perspective of the last three years, but it’s not terribly good news, either. A rate of 100-125K is needed to keep pace with the average number of work-aged adults emerging in the population each month, so 150K barely outpaces that growth. It would take a couple of decades at that rate to catch up to the jobs lost since the start of the Great Recession. Increasing job cuts won’t get us there, certainly.
Update: Fixed link to the DOL, thanks to Doug Mataconis.