By Ruth Mantell, MarketWatch –
WASHINGTON — Employment in the nation’s private sector is improving at a moderate pace, with two years of job gains now on the books, according to a monthly labor-market report released Wednesday by payrolls-processor Automatic Data Processing Inc.
Nonfarm private employment rose 170,000 in January, marking the 24th consecutive month of gains, led by small businesses and the service-providing sector, according to ADP. In December, the report said, private employment rose 292,000, compared with a prior estimate of 325,000.
Markets look to ADP’s private-sector figures to provide some guidance on the U.S. Labor Department’s figures, which include private and public payrolls. But ADP is known for diverging from the government’s data, which indicated that private-sector employment rose only by 212,000 in December.
The Labor Department’s jobs estimate will be released Friday. Economists polled by MarketWatch expect total nonfarm employment to have risen by 125,000 in January, compared with growth of 200,000 in December. Economists expect the U.S. unemployment rate to remain at 8.5 percent.
“Other indicators suggest some firming of labor-market conditions as well, including the downward trend in unemployment claims, upturns in the components of consumer sentiment and confidence influenced by perceptions about the availability of jobs, and a rising trend in workers voluntary quitting their jobs,” said Joel Prakken, chairman of Macroeconomic Advisers, which produces the ADP report.
Indeed, ADP’s report echoes other recent positive employment data. For starters, initial jobless claims are down about 10 percent from the pace of filings in the prior year.
In addition, while there was a dip in January for an overall gauge of consumer confidence, the data also showed that consumers’ outlook for jobs ticked higher. Also, the proportion of workers leaving their jobs by quitting is up from last year, according to Labor Department data.
By firm size, nonfarm private employment in January rose 95,000 at small businesses, 72,000 at medium businesses, and 3,000 at large businesses, according to ADP. By sector, service-provider employment rose 152,000, while goods producers added 18,000 jobs.
Wall Street economists had expected an overall private-employment gain of about 182,000.