US businesses add 257000 jobs, most in a year

The report is based on data collected from ADP clients in addition to lagged government data. Manufacturing, despite the worsening conditions, added a net 2,000 positions, according to the report. The good jobs news had no market effect, however. The latter number is used to calculate the nation’s gross domestic product (GPD), the widest measure of overall economic activity.

ADP’s figures often differ significantly from Labor’s initial private-sector estimates, and the two counts have varied by an average 52,000 a month over the past year, according to an analysis by High Frequency Economics.

The ADP report showed that payrolls for smaller businesses – those with 49 or fewer employees – increased by 95,000 last month. Economists expect the unemployment rate to fall to 4.9%, which would be the lowest since February 2008. “However, with domestic fundamentals expected to remain favorable for growth and with the Fed expected to only gradually unwind the highly accommodative monetary policy stance, the US economy should remain on solid footing in 2016”.

The report comes amid a lackluster period for the economy.

“For those who are staying at their jobs, they are seeing pay increases as well”, Zandi said on a conference call with reporters after release of the ADP National Employment Report for December. Factories added just 2,000 jobs last month, ADP said.

Construction companies also increased payrolls, adding 24,000, up sharply from November.

Services led the hiring surge, with 234,000 jobs created in the sector, up from 213,000 in November. The combined trade, transportation and utilities sector grew by 38,000 in December, a slight decline from an upwardly revised 41,000 in November.

“Strong job growth shows no signs of abating”, said Mark Zandi, chief economist of Moody’s Analytics.

Manufacturers had their second-straight month of hiring gains after shedding jobs for much of the year because the strong dollar hurt exports. If this pace of job growth is sustained, which seems likely, the economy will be back to full employment by mid-year.