The human resource departments of US companies have had a busy time of late, with an ADP survey showing that private businesses created 246,000 jobs last month, way more than the 151,000 recruitment’s in December last year. The survey has come just days before the first new jobs report since President Donald Trump assumed office less than two weeks ago.
The ADP report has put the number of new recruits in private sector far above the 165,000-mark estimated by the economists surveyed by Reuters. The encouraging number, if it is to be believed, would also mean that January added the most new workers since June last year.
“I don’t recall ever seeing such a discrepancy between print and estimate in this survey but ADP is saying there was [sic] seasonal issues with retail and moderate weather helped too,” commented Peter Boockvar, chief market analyst at The Lindsey Group.
Although the service sector still remained dominant, it has received a tough challenge from other sectors like construction and manufacturing, which have added jobs at a decent pace. Goods-producing companies hired 46,000 workers, while construction jobs fared well, too, with 25,000 new employees. The manufacturing sector added 15,000 new workers, followed by natural resources and mining at 6,000. This is in keeping with Trump’s electoral campaign during which he promised to bring back blue-collar jobs, especially the ones in the mining industry. Retailers, shipping firms and utility companies accounted for an impressive 63,000.
According to the ADP report, the manufacturing sector has recorded a two-year best. Other measures of manufacturing output show that the sector has come a long way after bouncing back from a strong dollar and slower overseas growth, which are believed to have been the prime reasons behind steady job losses for about two years.
The construction industry also registered its four-month best figures. Experts believe that the numbers were boosted by a warmer-than-usual weather.
White-collar jobs in the technical sector, which generally includes handsomely-paid jobs like engineers and architects, seemed to be lagging behind at 8,000 jobs.
The ADP data only covers private companies and often throws up figures that are at variance with government’s job report, which is due this Friday. Data provider FactSet has predicted an increase of 175,000 in the official report.
If ADP figures turn out to be true –or at least anywhere close to it– it would mean that the employers would have to lighten their pockets as the unemployment rate is already low at 4.7%. A higher pay and more incentives would act as catalysts in boosting the income growth.
That, however, doesn’t seem to reflect in the economic growth. The economy registered a modest growth of 1.9 percent in the final quarter of last year, with an overall annual growth of a meager 1.6 percent, the slowest yearly performance in five years.
The last time the economy clocked the 3-percent-mark was way back in 2005. With the new Trump administration already having projected job creation as one of its main goals, better things are expected to follow – at least for now.