ADP Sees Private Employers Add 325,000 Jobs in December

The private sector added 325,000 jobs in December, according to payroll giant ADP, the largest monthly gain since December 2010.

Small businesses with less than 50 employees added 148,000 jobs, while midsized businesses with between 50 and 499 employees accounted for 140,000 more jobs, and large businesses with 500 employees or more added 37,000 jobs.

The goods-producing sector added 52,000 jobs, while the service-providing sector accounted for 273,000 more jobs, ADP said Thursday.

In the manufacturing industry, 22,000 jobs were added. The construction industry added 26,000 jobs, but employment in the financial services sector declined by 1,000 in December.

Of the 148,000 jobs created by small businesses in December, 18,000 jobs were created in the goods-producing sector and 130,000 jobs in the service-providing sector.

ADP revised down slightly its employment numbers for November from a gain of 206,000 to 204,000 (see ADP Sees Private Sector Hiring Jump in November).

The jobs report bodes well for the unemployment numbers that are expected to be released Friday by the U.S. Bureau of Labor Statistics.

Joel Prakken, chairman of Macroeconomic Advisers, which compiles the monthly report with ADP, said the government’s official unemployment rate may drop with Friday’s report, as it did last month, though it may rise again in the first half of the year, depending on how greatly the problems in Europe with the sovereign debt crisis dampen gross domestic product figures in the U.S. The BLS report will also include figures from public sector employment, which has been on the decline as state and local governments cut back on workers.

Prakken also cautioned that the ADP report sometimes shows slightly larger figures on December payrolls than there are in reality because some employers don’t drop employees from their payroll systems who have either quit or been terminated so the companies can send them their W-2 forms early in the year. Still, he believes the report is a good indicator of a strengthening job market, especially in light of other recent positive economic reports such as drops in initial jobless claims.

“We can still feel pretty comfortable that there’s an improved signal,” Prakken said in a conference call with reporters Thursday. “This is the fifth month in a row when the monthly employment gain was larger than last month’s employment gain. There’s a strengthening here that’s noteworthy. The improvement here is consistent with other labor market indicators. Economic growth overall has ticked up after being quite slow in the first part of the year.”

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