WASHINGTON: US private payrolls increased by the most in eight months in December, pointing to sustained labour market strength though job gains last month were likely flattered by a seasonal quirk.
The ADP National Employment Report yesterday showed private payrolls jumped by 202,000 jobs last month, the largest gain since April, after an upwardly revised 124,000 rise in November. Private job growth averaged 163,000 jobs per month in 2019, slowing from an average increase of 219,000 in 2018.
Economists polled by Reuters had forecast private payrolls advancing 160,000 last month following a previously reported 67,000 rise in November.
ADP private payrolls tend to surge in December because of adjustment difficulties related to the purging of employees who have permanently left company payrolls. According economists, some companies keep workers who have resigned on their payrolls until they file year-end tax documents. In contrast, in the government’s more-comprehensive employment report, workers who are no longer getting paid are dropped from the data.
“The accuracy of the ADP’s first estimate of monthly employment growth has never been anywhere near as good as we would have expected given the richness of the data source,” said Paul Ashworth, chief US economist at Capital Economics in Toronto. “Nevertheless, this latest ADP reading supports our view that employment and GDP growth held up surprisingly well in the fourth quarter, even though some of the survey evidence weakened further.”
The ADP report, which is jointly developed with Moody’s Analytics, was published ahead of the Labour Department’s employment report for December scheduled for release tomorrow.