The economy created a net 297,000 jobs in the private sector last month, according to the ADP National Employment Report. That’s the largest monthly gain in the 10-year history for this series. The relatively large increase suggests that Friday’s employment report from the U.S. Bureau of Labor Statistics will bring equally encouraging news.
A strong rise in payrolls based on the widely followed government numbers would certainly be welcome after November’s disappointing news. Private sector employment added only 50,000 jobs on a net basis in November, according to the Labor Department—one of smallest gains since the labor market began recovering more than a year ago. Today’s report from ADP implies that job creation is poised for better days.
Thinking positively jibes with the latest batch of economic reports. The manufacturing sector, for instance, expanded again in December—the 17th straight month of growth, according to the Institute for Supply Management. And last week’s report on weekly jobless claims advises that new filings for jobless benefits dropped below 400,000 on a seasonally adjusted for the first time since the summer of 2008. The embedded message: job creation is picking up.
Additional confirmation may arrive on Friday, but tomorrow’s weekly update on jobless claims comes first. The first order of business is deciding whether last week’s drop below the 400,000 mark was a sign of things to come, or just a head fake from the week leading up to the Christmas holiday. What does the crowd think? For the moment, the consensus forecast anticipates a mild bit of backtracking in tomorrow’s number. Economists are expecting weekly jobless claims of 405,000, or moderately above last week’s 388,000, according to Briefing.com.