ADP said private sector job adds totaled 325k in Dec, a blowout compared to expectations of 178k and compares with 204k in Nov. Job gains were mostly led by small and medium sized businesses in the service providing sector but we also saw job gains of 52k in the goods producing area of which 22k were created in manufacturing and 26k in construction. Bottom line, it’s great news to see this level of job gains in the private sector but Macroeconomic Advisors, which compiles the data, did say December seasonals may have had ‘idiosyncratic’ influences of the report. Dec ’10 also saw a big jump from the prior few months only to fall back in the months after. With this said, tomorrow’s Payroll report is expected to show a gain of 175k in the private sector and we’ll see if economists revise that higher after ADP or take the seasonal computing issues seriously and leave them as is.
Initial Jobless Claims totaled 372k, 3k less than expected but last week was revised up by 6k to 387k. The 4 week average did fall to 373k from 377k. Continuing Claims fell by 22k but were 25k above estimates. Extended Benefits were little changed, rising 5k. Bottom line, the 4 week average is down to the lowest since June ’08 and if ADP is accurate, the reduced level of firing’s is being followed up by a faster pace of hiring’s. We’ll of course have to wait until tomorrow’s report for further confirmation as ADP in Dec ’10 reported a 246k private sector job gain while US private payrolls were higher by 167k. Either way, the labor market is improving. With respect to the S&P futures only bouncing modestly in light of the blowout ADP figure, Europe continues to trade weak and US retail comps had many misses in Dec