Strong U.S. private payrolls data point to economy's resilience

Wed Jan 6, 2016 1:02pm EST
 
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By Lucia Mutikani

WASHINGTON (Reuters) - U.S. private companies added workers at a brisk clip in December, pointing to underlying strength in the economy despite signs that growth slowed sharply in the fourth quarter.

While other data on Wednesday showed a slight moderation in services sector activity last month, details of the survey were fairly upbeat and suggested a pickup in the coming months.

The economy is battling the impact of a buoyant dollar, inventory glut and relentless spending cuts by energy firms, which have been hurt by lower oil prices. These headwinds have hobbled manufacturing and strained exports.

"Today's data may not have been uniformly strong, but investors have little cause to be concerned about the U.S. economy," said Joel Naroff, chief economist at Naroff Economic Advisors in Holland, Pennsylvania. 

Payrolls processor ADP said private-sector employment rose by 257,000 last month, the largest gain since December 2014, after increasing by 211,000 in November.

Although the ADP data tends to overstate job gains in December because of a year-end accounting quirk, economists said there were no signs the labor market was slowing.

The ADP report, which was jointly developed with Moody's Analytics, was released ahead of the government's more comprehensive December employment report on Friday.

According to a Reuters survey of economists, nonfarm payrolls probably increased 200,000 last month, on top of the 211,000 jobs added in November. The unemployment rate is seen unchanged at a 7-1/2-year low of 5 percent.   Continued...

 
Job seekers listen to a recruiter speak at a New York State Department of Labor recruitment office in New York January 6, 2010.  REUTERS/Lucas Jackson