Companies Added 215,000 Workers in December: ADP

Report suggests U.S. job market remained firm at year-end.

Companies added more workers than projected in December, indicating the U.S. job market finished 2012 with momentum, according to a private report based on payrolls.

The 215,000 increase in employment was the largest since February and followed a revised 148,000 gain the prior month that was larger than initially reported, figures from the Roseland, New Jersey-based ADP Research Institute showed today. The median forecast of 36 economists surveyed by Bloomberg called for a December advance of 140,000.

Sustained growth in hiring would help generate the wage gains needed to spur consumer spending, the biggest part of the economy. A Labor Department report tomorrow may show private payrolls rose by 150,000 last month, and unemployment held at an almost four-year low, according to the Bloomberg survey median.

“The job market held firm in December despite the intensifying fiscal cliff negotiations in Washington,” Mark Zandi, chief economist at Moody’s Analytics Inc., said in a statement. Moody’s produces the figures with ADP. “Businesses even became somewhat more aggressive in their hiring at year end.”

Estimates in the Bloomberg survey ranged from gains of 70,000 to 210,000. The prior month’s employment was previously reported as an increase of 118,000. ADP had estimated that superstorm Sandy reduced payrolls in November by about 86,000.

Another report today showed more Americans than forecast filed claims for unemployment insurance last week as the closing of some state agencies during the holidays prompted the government to estimate some figures. Applications for jobless benefits increased by 10,000 to 372,000 in the week ended Dec. 29, the Labor Department said. Economists forecast 360,000 claims, the Bloomberg survey showed.

Stock-index futures were little changed after the figures. The contract on the Standard & Poor’s 500 Index expiring in March fell less than 0.1 percent to 1,456.7 at 8:34 a.m. in New York after dropping as much as 0.3 percent earlier.

October marked a break from the way ADP had calculated employment figures dating back to 2001. The report is now derived using a larger sample and new methodology, and released jointly with Moody’s of West Chester, Pennsylvania.

Today’s figures showed that goods-producing industries, which include manufacturers and construction companies, increased workers by 28,000 in December. Employment in construction jumped by 39,000, while factories cut 11,000 jobs.


Sandy Effect

“Most encouraging is the revival in construction jobs, although the December gain was likely lifted by rebuilding after superstorm Sandy,” Zandi said.

Service providers added 187,000 workers.

Companies employing more than 499 workers added 87,000 jobs. Medium-sized businesses, with 50 to 499 employees, took on 102,000 and small companies increased payrolls by 25,000, ADP said.

The Labor Department may report that overall hiring, which includes government jobs, climbed 150,000 last month after rising 146,000 in November, according to the Bloomberg survey median. The jobless rate probably held at a four-year low of 7.7 percent.

Some reports showed the path to faster hiring in late 2012 was made difficult by the possibility of more than $600 billion in tax increases and government spending cuts in 2013. Lawmakers on Jan. 1 passed a bill preventing income tax increases for more than 99 percent of households even as Congress put off decisions on spending cuts and the debt ceiling.

Winnebago Industries Inc., a Forest City, Iowa-based maker of motor homes, is among companies expanding staff and adding work hours as it increases production. The company hired about 160 people, or 12 percent more hourly employees, in the quarter ended Dec. 1.

“We’re still supplementing by working overtime in many, many areas of the company,” Sarah Nielsen, chief financial officer, said on an earnings conference call on Dec. 20. “That’s been a factor for the last six months plus. And we’re going to have to continue to hire to support attrition.”


Bloomberg News


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