Automatic Data Processing (ADP) said that manufacturers added 19,000 net new workers in December, suggesting that hiring was relatively strong to end 2013. The average monthly net job gain in the fourth quarter (October to December) was 18,000. This was a significant improvement from the rest of the year, with the other nine months averaging a decline of 1,000 workers in the sector each month.
As such, it indicates that the pickup in manufacturing sales and output that we have seen in other data starting with the beginning of the third quarter has begun to translate into additional hiring. This is definitely a good sign, and it bodes well for similar findings in Friday’s jobs numbers from the Bureau of Labor Statistics. For comparison purposes, the BLS data had already reflected such a pickup, with 16,500 additional workers added on average for the four months of August to November.
Meanwhile, nonfarm private payroll growth also accelerated in the final month of 2013. The economy added 238,000 new workers in December, up from 229,000 in November. The three month average for the fourth quarter (October to December) was 224,333 – solid progress from the 165,000 average seen from January to September.
Looking at other sectors, professional and business services (up 53,000), construction (up 48,000), and trade, transportation and utilities (up 47,000) all experienced strong gains in employment in December. Small and medium-sized businesses (e.g., those with less than 500 employees) contributed just over 70 percent of the net new jobs for the month.
Chad Moutray is the chief economist, National Association of Manufacturers.