Automated Data Processing (ADP) reported that nonfarm payrolls rose 215,000 in December, its strongest gain since February. The bulk of these jobs stemmed from the service sector (up 187,000), but there was also a healthy contribution from construction (up 39,000). The latter was the result of an improving housing market.
In contrast to these more-positive numbers, manufacturing continues to struggle. Manufacturers lost 11,000 workers on net in December, or 65,000 over the past six months. Indeed, there have been notable declines in production and new orders in the second half of this year, with economic uncertainties and slowing global growth forcing many businesses to pull back. Employment in a number of sentiment surveys have also indicated some hesitance for additional hiring; although, that sentiment might change in the coming months if the economy appears to be firming up.
Medium-sized (e.g., those with 50-499 employees) and larger (e.g., 500 or more employees) businesses accounted for the bulk of the net job increases in December. In the two size groups, there were 102,000 and 87,000 additional employees on net, respectively. Smaller businesses with less than 50 employees contributed 25,000 workers to the total.
In addition to the sectors listed above, other industries with more workers in December included trade, transportation, and utilities (up 53,000), professional and business services (up 37,000), and financial activities (up 14,000).
Tomorrow, we will receive official government data on employment from the Bureau of Labor Statistics. The consensus estimate is for 150,000 net new nonfarm workers, with manufacturing job gains continuing to be weak.
Chad Moutray is chief economist, National Association of Manufacturers.