US private sector employment grows more than expected in December
By Michele Maatouk
Date: Wednesday 05 Jan 2022
(Sharecast News) - Private sector employment in the US grew more than expected in December, according to the latest data from ADP.
Employment rose by 807,000 from November, coming in ahead of expectations for a 400,000 jump. Meanwhile, the November total of jobs added was revised from 534,000 to 505,000.
Small businesses with fewer than 50 employees added 204,000 jobs, while medium businesses with between 50 and 499 employees added 214,000. Large businesses with more than 500 employees created a further 389,000.
The services sector added 669,000 jobs, while the goods-producing sector created 138,000 jobs.
Nela Richardson, chief economist at ADP, said: "December's job market strengthened as the fallout from the Delta variant faded and Omicron's impact had yet to be seen.
"Job gains were broad-based, as goods producers added the strongest reading of the year, while service providers dominated growth. December's job growth brought the fourth quarter average to 625,000, surpassing the 514,000 average for the year. While job gains eclipsed 6 million in 2021, private sector payrolls are still nearly 4 million jobs short of pre-Covid-19 levels."
Ian Shepherdson, chief economist at Pantheon Macroeconomics, said: "ADP's reading is a bit lower than the 1M-plus increase in private payrolls signalled by the Homebase small business employment data, but it is consistent with our view that the consensus forecast for Friday's official payroll number, 424K, is too low.
"Neither the ADP nor the Homebase numbers are consistently right about the official data, but when both point in the same direction, we are not going to ignore them; we're sticking with our 1,000K forecast for Friday. The story here, perhaps, is that the fading of some of the forces holding back labour supply - enhanced/extended unemployment benefits, and school/childcare closures - combined with strong labour demand, triggered rising participation late last year, facilitating a surge in payrolls. This could be interrupted in the January numbers by the Omicron Covid wave, but it looks as though December survey week fell in something of a sweet spot, after the Delta wave faded but before the Omicron surge began."
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