(Bloomberg) – Companies in the U.S. added more workers in January than projected, indicating the labor market remains healthy, according to data released Wednesday from the ADP Research Institute.
Highlights of ADP Employment (January)
Private payrolls increased by 234k (185k est.) after a revised 242k increase in Dec. Payrolls in goods-producing industries, which include builders and manufacturers, rose 22k; factory employment increased 12k Service providers added 212k workers to payrolls, the most since Nov. 2016
The data show a continuing trend of robust hiring as companies remain desperate for skilled and experienced workers. While steady job gains have yet to filter through into bigger wage growth, companies including Apple Inc., FedEx Corp., and Wal-Mart Stores Inc. offered bonuses in the wake of a Republican tax bill signed by President Donald Trump late last year.
The January ADP figure compares with the Bloomberg survey median for a 181,000 increase in private payrolls, when the government issues its monthly jobs report on Friday.
“The job market juggernaut marches on,” Mark Zandi, chief economist of Moody’s Analytics Inc. in West Chester, Pennsylvania, said in the statement. Moody’s produces the figures with ADP. “Given the strong January job gain, 2018 is on track to be the eighth consecutive year in which the economy creates over 2 million jobs. If it falls short, it is likely because businesses can’t find workers to fill all the open job positions.”
What Our Economists Say
The latest ADP data suggest jobless rate is on its way to sub-4% as the labor market is becoming extremely tight. Bloomberg Economics estimates unemployment rate will fall below 4% in just a few months. A pickup in trade, transportation and utilities over the last several months has been notable, highlighting an ongoing rotation into online trade, which has driven stronger hiring in the industries servicing those sales. -- Yelena Shulyatyeva, Bloomberg Economics
Construction payrolls increased 9,000 Professional and business services added 46,000 workers, and leisure and hospitality also took on 46,000 employees Payrolls in trade, such as retailers, transportation and utilities, increased 51,000 in January, while health care companies took on 41,000 workers Large firms, those employing 500 or more workers, increased staffing by 85,000 jobs; payrolls rose by 91,000 at medium-sized businesses, or those with 50 to 499 employees; and small companies added 58,000 jobs