ADP report suggests U.S. had moderate job growth in January

Job seekers line up to meet a prospective employer at a career fair at a hotel in Dallas.
(LM Otero / Associated Press)
Share via

WASHINGTON -- After the poor job growth in December and a recent series of weak economic data, all eyes will be on this Friday’s employment report for January from the Labor Department. Another bad month will further darken the outlook, while a strong rebound could revive the optimism that many had at the start of the year.

There’s a good chance, however, that the numbers will be somewhere in the middle.

In what may be a preview of Friday’s report, the payroll firm Automatic Data Processing Inc. said Wednesday that its data showed private businesses added a moderate 175,000 jobs last month. That is slightly less than the average monthly job growth over the last three years and in line with what many professional forecasters are expecting the Labor Department to report.

The department said last month that employers added just 74,000 jobs in December, but economists largely dismissed that number because of unusually cold weather and some other apparent anomalies. Making things even more suspect, the unemployment rate in December fell to 6.7% from 7% in November as more people dropped out of the labor force.


Analysts remain hopeful that the economy and job market will kick into slightly higher gear this year, thanks to strengthening home construction, business investment and consumer spending. But doubts have increased as financial problems in emerging markets have hammered stocks and a series of weaker-than-expected economic data -- including car sales, manufacturing and construction spending -- have further hurt confidence.

Construction employment fell in December, but if ADP is right, it bounced back last month to add 25,000 jobs. ADP says manufacturing, however, lost 12,000 jobs in January. The report indicates that professional and business services added the bulk of new jobs, with small and mid-size firms accounting for most of the gains.

The ADP report should be taken with a grain of salt. As analysts at UBS Securities noted, its estimates have missed the official Labor Department count by about 50,000 jobs a month on average. And the biggest miss was in December, when ADP was off by 151,000 from the government number.

Mark Zandi, chief economist at Moody’s Analytics, which helps ADP analyze the data, said he doesn’t think weather had a big effect on hiring in January. On the whole, he still sees the economy and job market gaining steam in the coming months, with average job growth rising to around 225,000 from the 175,000-to-200,000 pace of the last three years.

“It’s not an auspicious start,” he said on a conference call Wednesday, “but I think we’re still going to have a better year.”



Bernanke joins Brookings think tank as Yellen takes over as Fed chair

Wendy’s requiring reports on gestation crates from pork suppliers

NFL workers’ comp victory comes at a price