ADP said that manufacturers added 12,000 workers in January, extending the strong job gains in the sector seen last year. It was the eighth straight month of employment growth. Manufacturing business leaders have hired at a robust rate over the course of the past year, with the labor market tightening on improved economic outlook and healthy growth in activity. The sector has hired an average of 18,290 per month in 2017—a significant turnaround from 2016’s more-sluggish pace. We expect continued strength in job growth moving forward.
Meanwhile, total nonfarm private employment increased by 234,000 in January, easing just slightly from the 242,000 gain seen in December. Nonfarm private payrolls rose by 212,794 per month on average in 2017, up from the monthly average of 180,892 in 2016. In January, the largest employment growth included trade, transportation and utilities (up 51,000), education and health services (up 47,000), leisure and hospitality (up 46,000), professional and business services (up 46,000), financial activities (up 16,000) and construction (up 9,000). Small and medium-sized businesses (e.g., those with less than 500 employees) accounted for 63.7 percent of the net job growth for the month.
On Friday, we would expect to see similar labor market strength in the data from the Bureau of Labor Statistics (BLS), with the current consensus also indicating an increase of around 200,000 nonfarm payrolls in January. In addition, we would anticipate continued healthy job growth for manufacturers. In the BLS data, the sector added 25,000 workers in December, averaging 16,333 per month in 2017.