(Bloomberg) – Companies added the most workers in almost two years to U.S. payrolls in December, exceeding forecasts and signaling that the job market was solid as 2018 came to an end.
Private payrolls increased by 271,000 after a downwardly revised 157,000 advance in November, according to data released Thursday from the ADP Research Institute. The median forecast in a Bloomberg survey of economists was 180,000.
Key insights
The figures, coming a day ahead of the monthly jobs report due from the Labor Department on Friday, are a positive sign for private payrolls. Hiring was broad-based, reflecting gains in almost all industries, including manufacturing and construction. While growth in household purchases is underpinning demand for labor, the trade war with China has fueled business uncertainty. Companies have continued to hire at a solid pace even as the economy is projected to grow at a slightly slower rate in the fourth quarter amid trade and other headwinds. Payrolls in goods-producing industries, which include builders and manufacturers, increased 47,000 after a 13,000 rise while service providers added 224,000 workers following 144,000 in November.
Economist’s views
“Businesses continue to add aggressively to their payrolls despite the stock market slump and the trade war,” Mark Zandi, chief economist at Moody’s Analytics, said in a statement.
“We wrapped up 2018 with another month of significant growth in the labor market,” Ahu Yildirmaz, an economist with ADP, said in the statement. The report is produced by Moody’s Analytics and ADP.
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Hiring in construction rose by 37,000; factories added 12,000 workers. Professional and business services, education and health care boosted their workforce; employment in natural resources and mining fell by 2,000. Companies employing 500 or more workers increased staffing by 54,000 jobs; payrolls rose by 129,000 at medium-sized businesses, or those with 50 to 499 employees; and small companies’ payrolls grew by 89,000. A separate report Thursday from the Labor Department showed filings for unemployment benefits rose to a four-week high of 231,000 in the week ended Dec. 29, exceeding the median estimate of economists in Bloomberg’s survey.
