Private Sector Cut Only 84,000 Jobs in December
ADP Expects Job Gains in a Few Months
ADP noted that December's 84,000-job decline is the ninth straight monthly decline. "Employment losses are now rapidly diminishing and, if recent trends continue, private employment will begin rising within the next few months," ADP added.
The job loss totals in December by business size were: 34,000 (large), 25,000 (medium), and 25,000 (small).
Further, the services sector rebounded in December, adding 12,000 jobs -- the sector's first increase since March 2008. The goods producing sector lost 96,000 jobs, with manufacturing losing 43,000 positions within that category. The construction sector lost 52,000, its 35th consecutive monthly decline, bringing total construction jobs lost since the January 2007 peak to 1.777 million. The financial services sector saw a job loss of 12,000.
Investors should monitor monthly job reports because job creation is positively correlated with corporate revenue and earning gains. And as corporate earnings go, so goes the U.S. stock market.
Overall, this is another encouraging private sector jobs report, for two reasons. First, the decline in layoffs continues: The trend remains one toward eventual net, monthly job gains in the private sector. Second, the services sector posted a jobs gain for the first time in a year and a half: Given the large percentage of service jobs in the U.S. economy, if a growth trend emerges in that sector, it would bode well for overall employment gains.
Bottom Line: The U.S. job market continues to heal. A more telling set of data will be revealed Friday in the U.S. Labor Department's monthly, non-farm, payroll report, which contains both private and public sector job numbers. That report may very well show a net job gain for December, though the consensus of economists surveyed by Bloomberg News is that it will show no change in jobs in December, after an 11,000 job loss in November.