The Dec ADP employment report was a blowout to the upside as the private sector added 297k jobs vs the expectation of 100k and up from 92k in Nov. According to Macroeconomic Advisors, who compile the data, there may have been some seasonal issues with the calculation but believe the figure was strong nonetheless. Most of the job gains came from the small and medium sized businesses in the service sector. The service sector overall added 270k jobs with goods producing adding the balance of 27k. Manufacturing jobs rose by 23k while construction jobs were flat and the 1st time they haven’t fallen since June ’07. The financial services sector shed 8k jobs. Bottom line, the gains are clearly strong but we’ll see if Friday’s Government payroll figure confirms this as the two data points have rarely seen eye to eye month to month as ADP reported private sector job gains almost double the Government one in Nov. Either way, the labor market is clearly improving.
---Peter Boockvar
Update: Rosenberg wants, and gets, the last laugh.
"While today’s ADP number for December was surprisingly strong, the reality is that U.S. labour market remains in a state of disarray. The labour force gaps are huge if not unprecedented. Fully 6.3 million Americans have been actively looking for a job with no success for at least six months — a record, both in absolute and relative terms, to the size of the workforce. One cannot help but contemplate the looming social issues that will be involved if youth unemployment rates at 25% and adult male jobless rates at 10% are sustained."
---Rosenberg ibid
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