213,000 jobs were added January in the private sector according to the latest ADP National Employment report with growth in almost all sectors. Market expectations predicted a reversal to around 175,000 after the huge surge in private-sector employment which occurred in December.
Key Takeaways
- Nonfarm private employment increased by 213,000 jobs vs 175,000 expected.
- Mid-sized businesses continue to lead jobs creation, although there was less of an imbalance between large, medium, and small business jobs creation in January compared to December.
- Virtually all sectors saw growth, with manufacturing job creation reaching a four-year high despite weak reports from that industry in recent months.
Medium businesses with 50-499 employees led the way again in January with 84,000 jobs created over the course of the month in the private sector, followed by large businesses of over 500 employees which created 66,000 new jobs. Small businesses with 49 employees or fewer weren’t far behind, creating 63,000 new private sector jobs.
The goods-producing sector saw 68,000 total new jobs, with 35,000 new construction jobs and 33,000 new manufacturing jobs. However, the sector also lost -1000 jobs in the natural resources and mining industry.
The service-providing sector added 145,000 new jobs with professional and business services seeing the biggest increase by far at 46,000, followed by 37,000 in health care and social assistance, 37,000 in health care and social assistance, and increases in all other services as well.
Franchise employment added 33,000 new jobs, losing -1,400 in accommodations, -2,600 in business services, and -100 in food retailers, but gaining 36,000 in restaurants, 2,600 in auto parts and dealers, and 100 in real estate.
The matched sample used to develop the ADP National Employment Report was derived from ADP payroll data, which represents 411,000 U.S. clients employing nearly 24 million workers in the U.S. The December total of jobs added was revised down from 271,000 to 263,000. The ADP report measures nearly 24 million US workers.
ADP report on Jan private sector #employment was above expectations, rising by 213K jobs. Gains across the range of sectors with natural resources only soft spot. A very good gain in #manufacturing jobs. Small, medium and large #business all gained. Good report for the #economy. pic.twitter.com/gCT4ukhq90
— Dr Thomas Kevin Swift (@DrTKSwift) January 30, 2019
Expert Outlook
"The labor market has continued its pattern of strong growth with little sign of a slowdown in sight," said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute. "We saw significant growth in nearly all industries, with manufacturing adding the most jobs in more than four years. Midsized businesses continue to lead job creation, however the share of jobs was spread a bit more evenly across all company sizes this month."
Mark Zandi, chief economist of Moody's Analytics, said, "The job market weathered the government shutdown well. Despite the severe disruptions, businesses continued to add aggressively to their payrolls. As long as businesses hire strongly the economic expansion will continue on."
Market Reaction
Gold is holding recent gains and has actually ticked upwards even after the unexpectedly-strong labor market data which historically has often negatively impacted the price action and created selling pressure.
It’s possible that we’re simply seeing continued momentum from the price of the precious metal breaking the $1,300/oz line of resistance with spot gold last trading at $1,310.66/oz, near the low end of an admittedly tight range with a high of $1,315.79/oz and a low of $1,310.12/oz.
