Private-sector payrolls rose by 213K in January, according to ADP data released this morning. That was much better than the 174K increase economists expected and large enough to keep the less volatile 3-month average pace of job creation above 200K. The payroll gains this month were broad-based, with increases seen across companies of all sizes and from almost every sector. Hiring in the goods-producing arena was particularly strong in January, helped by elevated construction and manufacturing job creation.
Small business hiring was also encouragingly resilient following the holiday shopping season when separations typically rise. The longer-term trend in small business job creation may even be starting to stabilize, but the challenges of competing for talent with larger firms in a tightening labor market remain. Looking ahead to this Friday’s big nonfarm payrolls report, the ADP figures have historically not been a very accurate predictor and should instead be viewed more as a confirmation of prevailing labor market trends. Mark Zandi, chief economist of Moody’s Analytics, added that “The job market weathered the government shutdown well. Despite the severe disruptions, businesses continued to add aggressively to their payrolls. As long as businesses hire strongly the economic expansion will continue on.”
Post author: Charles Couch