US December ADP Employment - Backs positive labor market signals in initial claims
ADP’s December estimate for private sector employment of a 164k increase is stronger than expected and the highest since August. ADP is not a reliable guide to payrolls but the data does coincide with some improvement in jobless claims data in December.
ADP detail shows job growth coming largely in services, particularly education and health and leisure and hospitality, the latter showing renewed momentum. Regionally the data was mixed, with striking gains in the Northeast and West but slippage in the Midwest and South, an unlikely mix reminding us not to take ADP data as a reliable guide to payrolls.
The latest initial claims data covers a week two weeks after the survey week for the non-farm payroll. The data is constructive, initial claims falling to 202k from 220k and continued claims, which cover the week before initial claims, to 1.855k from 1.886k. However, holiday weeks do tend to see some volatility as seasonal adjustments are tricky.
In the payroll survey week the 4week average of 212.25k was down from 220.5k in November’s survey week, while the continued claims 4-week average, which had been trending higher, was unchanged from November at 1.865m, and that is supportive for ADP’s hints that payrolls may see upside risk.
