HR services company ADP says the U.S. added 170,000 private sector jobs in January, providing more evidence that while the economy isn’t backsliding, it also isn’t advancing.
The ADP report also adjusted down the December numbers from the initial 325,000 to 292,000. Nearly all the January gain, says ADP, came from companies with fewer than 500 workers, and all but 18,000 of the new jobs were in the service sector. Manufacturing added 10,000 workers during the month.
A year ago, ADP said 190,000 private sector jobs were created in January.
Yesterday’s report, says Peter Boockvar, equity strategist at Miller Tabak, “compares to the 2011 monthly average of 160,000 and thus points to a continued recovery but the mediocre pace this far into a recovery still remains frustrating,” He estimates that Friday’s official report from the U.S. Department of Labor will show 165,000 non-farm jobs created in January.
The ADP National Employment Report, produced jointly with Macroeconomic Advisers, is closely watched by economists as an indication of what the official U.S. Labor Department jobs report will show. The government report is usually released on the first Friday of every month.
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The two reports rarely match, largely due to differences in methodology. The government report also includes public sector employment. ADP’s report does not. However, as the Globe and Mail (Canada) said in reporting yesterday’s report, “Take the number with a large pinch of salt, but pay attention to the trend.”
That trend, though, is hard to read. While there hasn’t been a negative month since September 2010 (when census layoffs influenced the numbers), job gains have hovered around 100,000 for most of last year. Only in four months did the official numbers break 200,000. In three months, they were well below 100,000.
Like the job numbers, other signs are positive, if tepid. The Conference Board last week said its Leading Economic Index improved slightly in December to 94.3. It was the third consecutive monthly increase in the index. (The Board also announced changes in how the index is calculated.) Yesterday, the Board’s monthly count of jobs posted online showed 61,300 more jobs in January than the month before. It’s only the second increase in job postings in eight months.
Economists, now, are not expecting any surprises in Friday’s government report. The Wall Street Journal says economists are expecting it to show 125,000 new jobs and no change in the current 8.5 percent unemployment rate. Reuters puts the number at 150,000. And Bloomberg, which wrote a long piece this morning about growing optimism in the financial markets and among economists, says the Friday jobs report will come in at 145,000.