ADP: December job gains sustain market strength

Companies added more workers than forecast in December, indicating the U.S. job market was sustaining strength as 2014 drew to a close, according to a private report based on payrolls.
The 241,000 increase in employment followed a 227,000 rise in the prior month that was higher than initially reported, figures from the Roseland, N.J.-based ADP Research Institute showed last week. The median projection of 45 economists surveyed by Bloomberg called for an advance of 225,000 last month.
Headcounts are expanding as the world’s largest economy strengthens, driven in part by a pickup in household purchases as gasoline prices decline.
“The job market continues to power forward,” Mark Zandi, chief economist at Moody’s Analytics Inc. in West Chester, Pa., said in a statement. Moody’s produces the figures with ADP. “Businesses across all industries and sizes are adding to payrolls.”
Estimates in the Bloomberg survey ranged from gains of 185,000 to 310,000. The prior month’s figure was previously reported as an advance of 208,000.
The trade deficit narrowed more than forecast in November as U.S. petroleum imports sank to the lowest level in more than five years, a report from the Commerce Department showed last week. The gap shrank 7.7 percent to $39 billion, the smallest since December 2013, from October’s $42.2 billion.
Goods-producing industries, which include manufacturers and builders, increased headcount by 46,000. Hiring in construction rose by 23,000, while factories added 26,000 jobs, today’s report showed.
Payrolls at service providers increased by 194,000.
Companies employing 500 or more workers rose by 66,000 jobs. Medium-sized businesses, with 50 to 499 employees, took on 70,000 workers and small companies increased payrolls by 106,000.
The ADP report is based on data from businesses with almost 24 million workers on their combined payrolls.
Sustained gains in hiring will probably help lay the groundwork for a pickup in wages. Higher earnings, combined with the cheapest fuel costs since 2009, will provide the wherewithal for consumers to increase their spending, which accounts for about 70 percent of the economy. The outlook for the lowest earners also is improving. Voters approved ballot measures and legislatures enacted laws that allowed the minimum wage to rise in almost half of U.S. states on Jan. 1.
Monthly payroll gains averaged almost 241,000 from January through November, up from the prior year’s 194,000. The 2.7 million workers added to payrolls are the most since 1999.
Federal Reserve policymakers last month noted the improvement in the job market that’s underpinning growth in the sixth year of the U.S. expansion even as global markets weaken. They said they will be “patient” on the timing of the first interest-rate increase since 2006. •