The ADP National Employment Report for December put private payroll growth at 271,000 after a downward revision to the prior month to 157,000 (previously 179,000). Goods producers had a solid increase of 47,000 and service providers added 224,000 workers to payrolls. The increase was well above market expectations and may elicit whispers of an upside surprise for the December Employment Situation when it is released at 8:30 ET on Friday, January 4. Market surveys currently expect an increase of about 175,000 for private payrolls (around 180,000 for the total). However, the ADP number has enough of a history of big misses that it probably will not lead to a round of upping of forecasts so close to the actual release of the BLS data. Still, it suggests that last month’s disappointing reading of up 161,000 for private payrolls (155,000 for the total) was a one-off and that the underlying trend is higher despite the maturity of the expansion and minimal slack in labor resources.
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