Story URL: http://news.medill.northwestern.edu/chicago/news.aspx?id=199576
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Meghan Schiller/ MEDILL

Companies added 170,000 workers to their payrolls January. December's figure spiked due to holiday hiring.


January jobs rise 170,000 in private sector

by Meghan Schiller
Feb 01, 2012


U.S. companies added a slightly lower-than-expected 170,000 workers to their payrolls last month, according to a Wednesday report that hints that economic recovery will be slow, and isn’t likely to  provide much near-term help in lowering the nation’s painfully high employment rate.

The report from Automatic Data Processing Inc. showed hiring up in all sectors, with particular strength in small business and service-providing segments. ADP’s results landed a bit below the  182,000 new jobs that analysts surveyed by Bloomberg had been expecting. The ADP report also revised its December figure downward by a hefty 33,000, to 292,000.

ADP called the latest figure evidence of continued growth. “Over the last three months, the monthly gains in employment shown in the ADP National Employment Report have averaged 223,000, compared to 163,000 per month over all of 2011,” said Carlos Rodriguez, President and CEO of ADP. “This is a positive development that we hope will continue throughout the course of 2012.”

But not everyone was sold.

“Not a bad number but also not a great one,” Comerica Bank economist Robert A. Dye, said in a report. “The January ADP data are just a little weaker than expected,” he said, “but still consistent with an overall improving trend in labor market data.”

“Whichever way the data is cut,” said Diane Swonk of Mesirow Financial Holdings Inc.in her Economic Minds blog, “job gains are still too weak to move the needle on unemployment by much.”

Economist closely follow the ADP report, because it offers clues to the state of the labor market just days before the Labor Department releases its crucial jobs data each month.  Economists surveyed by Bloomberg are currently estimating that the next jobs report, due out Friday, will show the economy added 145,000 new jobs. ADP’s report is more upbeat, but it’s unclear whether job current job growth is enough to bring down the 8.5 percent unemployment rate.

The ADP data show that service-producing jobs experienced the most strength, climbing 152,000, although manufacturing jobs saw a modest increase of 10,000 with construction jobs – no doubt helped by warm winter weather -- growing by 2,000.  The manufacturing sector added 18,000 jobs.

Small businesses, those with less than 50 people on the payroll, showed the biggest improvement,adding 95,000 new workers in January.
The ADP report isn’t a perfect predictor of the Labor Department report, because ADP measures only private-sector jobs, while the Labor Department data includes public sector jobs-- and that sector has been bleeding jobs as financially pressed state and local governments cut their workforce.

“The only really good news is that public sector job losses are expected to temporarily abate,” said Mesirow’s Swonk.