Payroll and HR services firm ADP spread around a little holiday cheer yesterday when the company said 206,000 new jobs were added to private payrolls in November.
It came as a surprise to economists who had predicted a more modest increase of about 130,000, according to a survey by Dow Jones Newswires. In addition, ADP revised its October private-sector growth number by 20,000 to 130,000.
The ADP report sparked a stock rally that ignited after it became known that the U.S. Federal Reserve and other central banks were coordinating efforts to help Europe’s debt crisis. The Dow rose more than 400 points, settling at just under that after lunch in New York.
While the numbers don’t often sync well with the official numbers from the U.S. Department of Labor, ADP’s National Employment Report offers guidance about the monthly government report. That report is due out tomorrow morning. Before yesterday’s ADP report, estimates of what the Labor Department would show ranged from around 100,000 to 130,000. After the release, Reuters reported Deutsche Bank raised its forecast to 150,000, while Capital Economics adjusted its 1000,000 estimate to 140,000.
The Reuters report also noted the long-running debate among economists over the validity of the various jobs numbers. ADP and its partner in the national report Macroeconomic Advisers produce its job growth estimates from ADP’s payroll processing data. The company handles the payroll for more than 500,000 business clients in the U.S. The official report, produced by the U.S. Bureau of Labor Statistics, is derived from a survey of payroll data from some 140,000 businesses and governments.
The ADP report says most of November’s job growth was in the service sector, which added 178,000 positions. Businesses with fewer than 50 employees accounted for 95,000 of those jobs. Businesses from 50-499 workers added 67,000 service jobs.
The goods-producing sector added 28,000 workers. All the gain came from employers with fewer than 500 workers. The biggest employers, those with 500 and more employees, dropped 4,000 jobs during the month.
Tempering the strong jobs growth news from ADP is a Conference Board report showing a sixth consecutive month of fewer jobs being advertised online. The Conference Board’s Help Wanted OnLine survey said 76,200 fewer jobs were posted online in November than in October.
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“The November decline in labor demand, following on the heels of the drops for the previous five months, is not good news for the labor market,” said June Shelp, vice president at The Conference Board.
During the month 3,857,200 jobs were listed online, according to the data compiled by Wanted Technologies.
Also released was the monthly layoff report from global outplacement firm Challenger, Gray & Christmas. The firm said U.S. employers announced job cuts totaling 42,474, down 0.7 percent from 42,759 in October. Announced layoffs so far this year are ahead of the total for all of 2010, the firm said. Including the November number, the total this year is 564,297. The total for 2010 was 529,973.
Most of the layoffs this year have come from government, the Challenger report says. Some 180,000 layoffs were announced there. The financial sector was a distant second with 56,000 announced layoffs.