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Private Sector Employment Growth Triples in December?

David Godow
January 5, 2011, 12:00pm

According to the latest employment report released by Automatic Data Processing, Inc. (HT: Calculated Risk), the U.S. economy created 297,000 private sector jobs in the month of December, over three times the amount ADP estimated for November. From the report (which doesn't track gov't employment):

This month’s ADP National Employment Report suggests nonfarm private employment grew very strongly in December, at a pace well above what is usually associated with a declining unemployment rate.
After a mid-year pause, employment seems to have accelerated as indicated by September’s employment gain of 29,000, October’s gain of 79,000, November’s gain of 92,000 and December’s gain of 297,000. Strength was also evident within all major industries and every size business tracked in the ADP Report.

This is a massive improvement from the weak if steady job growth seen over the past few months, and a heartening sign for continued growth in 2011. Some things to note:

- 90% of the job creation was estimated to come from the service sector, with continued negative growth in the construction and financial industries.

- Over half came from "medium-sized businesses" of 50-499 employees, with most of the remainder coming from small firms with 1-49 workers.

As noted at CalcRisk, the official Labor Dept. employment numbers are expected to be more modest, with a net increase of 140,000 payroll jobs in December. That is still heartening news, and would also be several times larger than previous months.


David Godow is Research Assistant


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