US private hiring surges to 246,000 in January: ADP
US private-sector hiring surged in January with gains across most industries and company sizes, in another sign the economic recovery is picking up steam, payroll services firm ADP reported Wednesday.
Private payrolls rose 246,000 in the month, far more than analysts expected, and compared to just 151,000 in December. It was the biggest increase since June of last year.
The sign of strength in the labor market comes just hours before the Federal Reserve is due to release its latest decision on monetary policy.
Central bankers have been cautious about raising the benchmark interest rate too quickly and are not expected to move at this meeting, but pressure could increase to tighten policy in March.
"The US labor market is hitting on all cylinders and we saw small and midsized businesses perform exceptionally well," said Ahu Yildirmaz, vice president of the ADP Research Institute.
"Further analysis shows that services gains have rebounded from their tepid December pace, adding 201,000 jobs," he said in a statement. "The goods producers added 46,000 jobs, which is the strongest job growth that sector has seen in the last two years."
The rebound in goods-producing industries is particularly significant since the sector saw a decline of 16,000 in December.
The data, which is extracted from ADP payroll data, is frequently used as an indicator of the Labor Department's monthly employment report, which is due out Friday.
Analysts are expecting a jump of 170,000 in non-farm payrolls in January, and 175,000 for private jobs, but they may revise their estimates following the ADP data. The consensus forecast for ADP was for a gain of just 165,000.
Jim O'Sullivan, chief US economist for High Frequency Economics, cautioned that the ADP report is "far from infallible" as a signal of the monthly government data.
However, he agreed there is a chance for an "above consensus" employment figure on Friday.
Mark Zandi, chief economist of Moody’s Analytics said in a statement, "2017 got off to a strong start in the job market. Job growth is solid across most industries and company sizes. Even the energy sector is adding to payrolls again."
The biggest gains were in trade, transportation and utilities, which surged 63,000 after a bigger gain in the prior month, and professional and business services which jumped 71,000 after a modest gain in December. Education doubled the gain of the prior month.
© 2017 AFP