US businesses ramped up hiring last month in the latest sign that the nation's economy is expanding despite worries about global growth that have sent financial markets tumbling.
Payroll processor ADP says that companies added 241,000 jobs in December, up from 227,000 in November. That suggests Friday's government report on December job gains will also be healthy.
"The frequent and significant revisions to the ADP employment report limit its usefulness in short-term forecasting," Barclays Research economist Jesse Hurwitz wrote in an e-mailed analysis. "However, we view this morning’s report as consistent with our outlook for private payroll gains of 240k in the employment report from the Labor Department this Friday.
The ADP numbers cover only private businesses and sometimes diverge from the government's more comprehensive report, which includes government agencies.
Robust job gains over the past year or so, along with improvements in wages, have helped bolster Americans' optimism about the economy overall. As Christian Science Monitor reporter Mark Trumbull wrote Tuesday:
After years of sluggish recovery, the job market last year posted its strongest employment gains since the 2007-09 recession. Forecasters say annual economic growth could reach 3 percent this year for the first time since 2005. And the progress is starting to be felt by growing numbers of workers and consumers...
The rising confidence coincides with improvements in home values and a high stock market (even after recent dips), which bolster household wealth. Plunging oil prices act like a tax cut, putting more money in consumer pockets to use for other things. The job market and the climate for getting approved for loans also continue to improve.
The nation’s official unemployment rate has fallen below 6 percent of the labor force. But economists still see lots of room for improvement in the job market. A strengthening economy should start to pull labor-force dropouts back into the hunt for jobs.
Economists forecast the government's figures will show that employers added 240,000 jobs in December, according to a survey by financial data provider FactSet. The unemployment rate is expected to remain at 5.8 percent.