Economy, Small Business

Economic Data Roundup (01/04/2018)

1/4/18 12:00 PM

iStock-618526794.jpgThere were two important reports on the U.S. economy released this morning. First, data from ADP showed that private-sector payrolls in America rose by 250K last month. That is up from 185K in November, significantly better than expected, and the highest reading since March of last year. Under the hood, most of the private-sector payrolls added last month were as usual found in the services sector (+222K), but the goods-producing sector also posted a solid 28K gain thanks to strong manufacturing and construction hiring. As for small business job creation, payrolls at firms with 1-49 employees rose by 94K in December, the largest increase since March 2017 and equal to 38 percent of all the private-sector payrolls added to the economy last month. Mark Zandi, chief economist of Moody’s Analytics, added that “The job market ended the year strongly. Robust Christmas sales prompted retailers and delivery services to add to their payrolls. The tight labor market will get even tighter, raising the specter that it will overheat.”

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Elsewhere, a report from Challenger, Gray & Christmas showed that 32,423 corporate layoffs were announced in America last month. That is a 7.4 percent decrease from November and 3.6 percent lower compared to this same period last year. More importantly, U.S.-based employers announced 418,770 job cuts in 2017, a 20.5 percent decline from 2016 and the lowest annual total since 1990. As for the layoffs that did occur last year, the bulk of the cuts could be found in the retail sector due to increased competition from online merchants (Amazon). Looking ahead, John A. Challenger, chief executive officer of Challenger, Gray & Christmas, said that “The tight labor market, coupled with uncertainty surrounding health care and tax legislation, possibly kept employers from making any long-term staffing decisions this year. However, 2018 may see an increase in job cut announcements, as companies realign with consumer demand.” Mr. Challenger added that “While we may see more job cuts in the first quarter of 2018, some companies have announced wage increases and bonuses for employees due to the passing of the tax bill.”

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Sources: Econoday, ADP, Challenger, Gray & Christmas

Post author: Charles Couch