The private-sector job market made its fourth straight gain, according to the ADP employment report for December 2013. The payroll giant projects from its data that the US economy added 238,000 jobs in the private sector, the best month of the year:
Private sector employment increased by 238,000 jobs from November to December, according to the December ADP National Employment Report®. Broadly distributed to the public each month, free of charge, the ADP National Employment Report is produced by ADP® , a leading global provider of Human Capital Management (HCM) solutions, in collaboration with Moody’s Analytics. The report, which is derived from ADP’s actual payroll data, measures the change in total nonfarm private employment each month on a seasonally-adjusted basis.
The previous month’s report came in at 229,000, so this is just a small change month-on-month. However, the trend has moved positively since August’s wan 151K result, and the last three months showed above-200K results. Those were the only three months of 2013 above that threshold, and the initial October report from ADP was 166K, while November’s got ramped up from 215K.
Paul Davidson at USA Today hailed an economy “on a roll”:
The labor market ended 2013 on a roll, with businesses continuing a several-month streak of solid payroll gains by adding 238,000 jobs in December, payroll processor ADP said Wednesday.
Economists expected ADP to report 200,000 additional private-sector jobs, according to a consensus forecast. The Labor Department’s more closely watched survey of businesses and federal, state and local governments, due Friday, is expected to show 195,000 jobs were added last month.
Both employment reports capture similar trends but ADP has had mixed success in forecasting the Labor tally. The two reports sometimes diverge more sharply in December because of holiday absences and the tendency of employers to purge their payrolls of employees who have left the company, says Jim O’Sullivan, chief U.S. economist of High Frequency Economics.
The pace of job growth would be a decent increase, but still far below what would be needed to work off the backlog of the millions who have left the workforce over the last four and a half years of “recovery.” More than 10 million have exited, and with the economy needing to add 150,000 a month to keep up wit population growth, only an explosive expansion in the job market will turn around the chronic issue of joblessness. At the rate suggested by this report, it would take 57 months to create enough jobs to put half of that ten million back to work, and that’s only slightly longer than the number of months from the technical recovery in June 2009 to now. Still, the inventory expansion in Q3 suggests that businesses see a boost coming and will be hiring to meet it.
The BLS report will come out on Friday, and we should see the Gallup survey tomorrow.