Jesus' Coming Back

Private Sector Hiring Surges to Blistering Pace in Defiance of Fed’s Efforts to Tame Inflation, ADP Report Shows

U.S. businesses added workers to their payrolls at a blistering pace in December, the latest indicator that efforts by the Federal Reserve to cool off demand for labor have not gained a solid foothold.

Payroll processor ADP said that private sector employment grew by 235,000, above all estimates of analysts surveyed by Econoday. The median forecast was for 145,000.

Job growth accelerated in December, according to ADP, and was higher than previously thought in November. The November figure was revised up from 127,000 to 182,000. This means that the slowdown in hiring—something the Fed has been trying to bring about through rate hikes—in November was far less significant than previously indicated. In October, the ADP report indicated businesses added 239,000 jobs.

Leisure and hospitality employment grew by 123,000, ADP said. Professional and business services added 52,000 workers. Education and health services grew by 42,000. A category called “other services” grew by 31,000 workers. Information, where many layoffs have been reported, still managed to add 1,000 new workers to payrolls.

Among services, there was a contraction in finance, which shed 12,000 jobs. The sector that includes trade transportation and utilities shrank by 24,000.

Goods producing industries added jobs overall thanks to a surprising surge in construction hiring. Construction employment jumped 41,000, surprising given the slump in residential real estate but consistent with the unexpected rise in construction spending in November that was reported earlier this week.

Manufacturing employment shrank by 5,000, providing further confirmation of the slump in factory output and demand for goods seen in reports this week from S&P Global and the Institute for Supply Management. Natural resources and mining employment shrank by 14,000.

Small and midsized businesses accounted for the growth in December. Businesses with more than 500 employees cut payrolls by 151,000 jobs in December. Those with 49 or fewer grew payrolls by 195,000. Businesses with 50 to 499 employees grew by 191,000.

“Job resurgence was seen in the last two month of 2022 led by consumer-facing service industries,” ADP said in its report.

The ADP figures, which follow closely on the heels of a government report showing far more job vacancies than expected, suggests that the Federal Reserve’s campaign to tame inflation by slowing demand for labor has not yet been very effective. This could mean that the rate hikes are taking longer to slow demand or that monetary policy is not yet as restrictive as required to tame inflation.

ADP revised its private sector payroll report this summer. While the report formerly attempted to anticipate what the government’s official payroll numbers would indicate when released the following Friday, ADP says it is no longer attempting to forecast the Department of Labor report. Instead, its report—based on data from its customers—is independent data about the health of the labor market, according to ADP.

Breitbart

Comments are closed.

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More