Private sector job creation surged in November, with ADP reporting 215,000 new jobs in a number that could put some heat on the Federal Reserve to begin reducing its monthly stimulus.
Economists expected ADP to report the private sector created 173,000 new jobs in November.
"This feels pretty good," Mark Zandi, an economist with Moody's Analytics, which assists ADP in putting together the monthly report, said on CNBC. "I'm surprised at how well the job market held up in the face of what happened in Washington."
Economists had expected the government shutdown in early October to put pressure on the job market, but that has not shown up in any of the data released since then.
In fact, ADP (ADP) sharply revised its October number up to 184,000 from an initially reported 130,000.
Services again led job creation with 176,000 new positions, though goods-producing added a healthy 40,000 in November, up from 29,000 in the previous month. %VIRTUAL-article-sponsoredlinks%Construction and manufacturing were good for another 18,000 jobs each. For manufacturing, it was the best month in nearly two years.
As always, the numbers will be read through the prism of Fed policy.
If the private payrolls count is an accurate barometer for the nonfarm payrolls reading the Bureau of Labor Statistics releases Friday, it could up the pressure for the U.S. central bank's Open markets Committee to ease off on the $85 billion in monthly bond purchases its carries out through its quantitative easing program.
"The market is trying to work out whether good news is bad but clearly this report argues in favor of a December tapering at the FOMC," Andrew Wilkinson, chief economic strategist at Miller Tabak, said in a note.
November job creation tilted heavily towards businesses with fewer than 50 employees, which added 102,000 new positions. Large firms contributed 65,000 while medium-sized companies created 48,000.
9 Numbers That'll Tell You How the Economy's Really Doing
ADP: Private Employers Add 215,000 Jobs in November
The gross domestic product measures the level of economic activity within a country. To figure the number, the Bureau of Economic Analysis combines the total consumption of goods and services by private individuals and businesses; the total investment in capital for producing goods and services; the total amount spent and consumed by federal, state, and local government entities; and total net exports. It's important, because it serves as the primary gauge of whether the economy is growing or not. Most economists define a recession as two or more consecutive quarters of shrinking GDP.
The CPI measures current price levels for the goods and services that Americans buy. The Bureau of Labor Statistics collects price data on a basket of different items, ranging from necessities like food, clothing and housing to more discretionary expenses like eating out and entertainment. The resulting figure is then compared to those of previous months to determine the inflation rate, which is used in a variety of ways, including cost-of-living increases for Social Security and other government benefits.
The unemployment rate measures the percentage of workers within the total labor force who don't have a job, but who have looked for work in the past four weeks, and who are available to work. Those temporarily laid off from their jobs are also included as unemployed. Yet as critical as the figure is as a measure of how many people are out of work and therefore suffering financial hardship from a lack of a paycheck, one key item to note about the unemployment rate is that the number does not reflect workers who have stopped looking for work entirely. It's therefore important to look beyond the headline numbers to see whether the overall workforce is growing or shrinking.
The trade deficit measures the difference between the value of a nation's imported and exported goods. When exports exceed imports, a country runs a trade surplus. But in the U.S., imports have exceeded exports consistently for decades. The figure is important as a measure of U.S. competitiveness in the global market, as well as the nation's dependence on foreign countries.
Each month, the Bureau of Economic Analysis measures changes in the total amount of income that the U.S. population earns, as well as the total amount they spend on goods and services. But there's a reason we've combined them on one slide: In addition to being useful statistics separately for gauging Americans' earning power and spending activity, looking at those numbers in combination gives you a sense of how much people are saving for their future.
Consumers play a vital role in powering the overall economy, and so measures of how confident they are about the economy's prospects are important in predicting its future health. The Conference Board does a survey asking consumers to give their assessment of both current and future economic conditions, with questions about business and employment conditions as well as expected future family income.
The health of the housing market is closely tied to the overall direction of the broader economy. The S&P/Case-Shiller Home Price Index, named for economists Karl Case and Robert Shiller, provides a way to measure home prices, allowing comparisons not just across time but also among different markets in cities and regions of the nation. The number is important not just to home builders and home buyers, but to the millions of people with jobs related to housing and construction.
Most economic data provides a backward-looking view of what has already happened to the economy. But the Conference Board's Leading Economic Index attempts to gauge the future. To do so, the index looks at data on employment, manufacturing, home construction, consumer sentiment, and the stock and bond markets to put together a complete picture of expected economic conditions ahead.