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ADP estimates 215,000 jobs created in Dec.

9:32 AM, Jan 3, 2013   |    comments
A National Career Fairs' job fair in New York in October.(Photo: Bebeto Matthews, AP)
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Private sector employers added 215,000 jobs in December, beating expectations, as construction surged and businesses of all sizes added workers, according to a monthly survey by payroll-processing company ADP.

In another report Thursday, the Labor Department said weekly claims for unemployment benefits rose 10,000 to 372,000 in the latest week.

The hiring reflected in the ADP report defied expectations that companies were holding back because of worries about the fiscal cliff, said Mark Zandi, chief economist at Moody's Analytics, which produces the report with ADP. The construction industry alone added 39,000 workers during the month. In the last year, private employers have added 1.7 million jobs, ADP said.

``The clearest point in the data is that the fiscal cliff debate has not seemed to do any significant damage,'' Zandi said on a conference call. ``It's very positive, because there is more fiscal debate to come,'' as Congress turns from the tax bill it approved this week to considering spending cuts and an increase in the debt ceiling, Zandi said.

The gain in construction was probably driven by recovery efforts following Superstorm Sandy, but smaller monthly gains are likekly to be sustained as commercial construction picks up this year, Zandi added.

The Federal Reserve, which has been trying to stimulate the economy with monetary policy to offset the expected drag from higher taxes and spending cuts, is likely to be heartened by the news, but will continue its easy-money policy, Zandi said.

``I don't think they'll think it means we're out of the woods -- I certainly don't,'' Zandi said. In the next few months, job growth is likely to stay close to the 150,000 new jobs per month pace it has sustained during the recovery to date, he said.

Economists surveyed by Bloomberg expect the government to say the economy added 155,000 jobs in December, with the most bullish economist predicting 225,000 jobs and the most pessmistic estimate coming in at 125,000.

The Bloomberg survey predicts the unemployment rate will rise to 7.8% from 7.7% in November. Last month's rate dropped 0.2 percentage points because more workers reported they had stopped looking for work.

Stock index futures trimmed their losses on the news.

ADP also revised its estimate of November hiring, saying companies added 148,000 workers during that month. That's 30,000 more than the original estimate released in early December.

The report comes a day ahead of the government's closely-followed report on employment. Economists' consensus forecast predicts the report will show the economy gained 150,000 jobs last month while the unemployment rate held steady at 7.7%.

The revised ADP report for November brings the payroll firm's estimate of job growth to within 1,000 new jobs of the government's initial estimate. The ADP report has been criticized for being an inaccurate indicator of what the government will report, and Moody's has tweaked the methodology of the report since it began to work with ADP in the fall, Zandi said.

In the unemployment claims report,, the winter holidays likely distorted the data for a second week.

The Labor Department said weekly applications rose 10,000 to a seasonally adjusted 372,000, while the previous week's total was revised higher.

Many state unemployment offices were closed last week for the New Year's holiday. As a result, the department relied on estimates for nine states. Two weeks ago, the department estimated 19 states because of Christmas closings.

In a typical week, the government estimates only one or two states.

USA Today

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