US private sector adds 250,000 jobs in December

Private sector employment in the US unexpectedly rose in December, according to data released by ADP on Thursday.

Employers added 250,000 jobs last month versus 185,000 in November, a figure that was revised down from 190,000. Economists had been expecting an unchanged reading.

Small businesses with fewer than 50 employees added 94,000 jobs, while medium businesses with between 50 and 499 employees added 100,000 jobs. Large companies with 500 or more employees recruited an extra 56,000 people.

The goods-producing sector added 28,000 jobs, with the majority of those in construction, while the service industry recruited an extra 222,000 people, with professional/business services adding 72,000 members of staff.

Mark Zandi, chief economist at Moody’s Analytics, said: "The job market ended the year strongly. Robust Christmas sales prompted retailers and delivery services to add to their payrolls. The tight labour market will get even tighter, raising the spectre that it will overheat.”

Ahu Yildirmaz, vice president and co-head of the ADP Research Institute, said: "We’ve seen yet another month where the labour market has shown no signs of slowing. Throughout the year there was significant growth in services except for an overall loss of jobs in the shrinking information sector. Looking at company size, small businesses finished out 2017 on a high note adding more than double their monthly average for the past six months.”

Capital Economics economist Paul Ashworth said: "The bigger-than-expected 250,000 gain in the ADP measure of private payroll employment in December provides a little extra support for our above-consensus view that the official non-farm figure, due out tomorrow, will show a 210,000 increase in employment. The consensus estimates for both the ADP and non-farm payrolls are a similar 190,000."

He said the gain was probably skewed upwards by the recent strength of the official non-farm payrolls figures, however, which are used as one of the inputs. "Nevertheless, after the earlier disruption caused by the hurricanes, the labour market clearly ended 2017 with some considerable momentum."