ROSELAND, N.J. – Hiring at U.S. companies accelerated this month from December’s four-month low, according to preliminary data released today by ADP Employer Services.
Nonfarm private payrolls grew in January to 116.1 million, adding a seasonally adjusted 130,000 jobs compared with December levels. The increase was three and a half times the previous month’s revised 37,000-job gain, though it still fell nearly 25 percent short of November’s revised 173,000-job gain.
Analysts had expected the January increase to match the 40,000 jobs of ADP’s initial December estimate, based on the median forecast from a Bloomberg News survey of 21 economists. (Their estimates ranged from a 15,000-job decline to a 95,000-job gain.) Instead, it exceeded the fourth quarter’s 110,000-job-per month average growth.
“It makes me think that the payroll number [in tomorrow’s federal jobs report] could be higher” than most analysts have been predicting, Kevin Logan, senior market economist at Dresdner Kleinwort in New York, told Bloomberg News. But despite this month’s gains, he said, “the trend is still toward slower job growth.”
The gains again were concentrated in small and mid-sized businesses, which added 122,000 jobs in January after adding 73,000 the month before. Businesses with 49 or fewer workers added 70,000 jobs this month, while mid-sized businesses with 50 to 499 workers added 52,000. Private employers with 500 or more workers added 8,000 jobs this month after eliminating after shedding 35,000 in December.
Total private non-farm employment in service-providing industries grew by 141,000 jobs, compared with December. Small service businesses added 72,000 jobs last month, mid-sized firms added 61,000 and large businesses added 8,000.
Employment in goods-producing industries declined for a 14th consecutive month, shrinking by 11,000 jobs – even though manufacturing employment was flat, ending its 18-month slide. Small goods-producing businesses lost 2,000 jobs this month and mid-sized companies lost 9,000, while employment at large companies was unchanged from December.
“The two sectors hit hardest by recent problems in mortgage markets have been residential construction and financial activities related to home sales and mortgage lending,” the ADP report noted.
Performance in those sectors was mixed: The financial services sector added 1,000 jobs this month. But the construction sector lost 13,000 jobs in its 14th consecutive monthly decline, “bringing the total decline in construction jobs since the peak in August 2006 to 215,000,” the report said.
The ADP National Employment Report – produced by ADP and Macroeconomic Advisers LLC of St. Louis – is based on a monthly survey of nearly 400,000 ADP customers nationwide that represent nearly 23 million U.S. employees.
ADP Employment Services – a division of Automatic Data Processing Inc.(NYSE: ADP) – handles payroll for 1 in 6 private-sector employees nationwide. For more information, including the monthly ADP National Employment Report, visit www.adp.com.
