Publications
Partners
New York - US private sector job growth accelerated in November as employers created the most jobs in nearly a year, prompting some economists to raise their forecasts for Friday’s more comprehensive US government labour report.
The beleaguered housing market also showed some unexpected cheer as pending home sales surged in October amid low mortgage interest rates.
The ADP National Employment Report on Wednesday showed private employers added 206,000 jobs this month, surpassing economists’ expectations for a gain of 130,000 jobs. It was the biggest gain since December 2010.
The report comes two days ahead of the closely watched nonfarm payrolls report. While fears of another U.S. recession have ebbed, the weak labor market remains one of the biggest hurdles for the economic recovery.
“So far in the current U.S. economic expansion, the only period of relatively healthy job creation lasted for a few months from late last year to this spring,” Ryan Wang, U.S. economist at HSBC Securities USA, wrote in a note.
“Today’s job gain of 206,000 in November raises the possibility that we may be on the cusp of a similar period of job creation.”
The government’s November report on Friday, which includes both public and private sector employment, is expected to show a rise in overall nonfarm payrolls of 122,000 this month and a rise in private payrolls of 140,000.
Economists often refer to the ADP report to fine-tune their expectations for the payrolls numbers, though it is not always accurate in predicting the outcome.
Deutsche Bank raised its forecast for Friday to 150,000 from 125,000, while Capital Economics upped its expectations to 140,000 from 100,000.
One economist, however, cautioned that the ADP number has a tendency to overshoot in November and warned against building too much optimism ahead of the Friday report.
“A seasonal adjustment quirk typically -- six of the past seven years -- generates November ADP readings well above the underlying trend,” Ian Shepherdson, chief U.S. economist at High Frequency Economics, wrote in a note.
“In 2010 and 2011 ADP was an average of 64,000 better than the prior three-month average, so applying the same margin today suggests the ’real’ November ADP number was 140,000.”
Shepherdson said he was maintaining his forecast for a gain of 125,000 payrolls.
Macroeconomic Advisers’ Joel Prakken said he didn’t see any evidence of seasonal affects in the day’s data.
“I don’t see any technical or seasonal reason to question the momentum in today’s numbers,” Prakken told a conference call of journalists. Macroeconomic Advisers jointly developed the report with ADP.
The data helped boost U.S. stocks, as indexes rallied following coordinated action by central banks to prevent a lack of liquidity in the global financial system.
The beleaguered housing market also showed some unexpected cheer as pending home sales surged in October amid low mortgage interest rates.
The ADP National Employment Report on Wednesday showed private employers added 206,000 jobs this month, surpassing economists’ expectations for a gain of 130,000 jobs. It was the biggest gain since December 2010.
The report comes two days ahead of the closely watched nonfarm payrolls report. While fears of another U.S. recession have ebbed, the weak labor market remains one of the biggest hurdles for the economic recovery.
“So far in the current U.S. economic expansion, the only period of relatively healthy job creation lasted for a few months from late last year to this spring,” Ryan Wang, U.S. economist at HSBC Securities USA, wrote in a note.
“Today’s job gain of 206,000 in November raises the possibility that we may be on the cusp of a similar period of job creation.”
The government’s November report on Friday, which includes both public and private sector employment, is expected to show a rise in overall nonfarm payrolls of 122,000 this month and a rise in private payrolls of 140,000.
Economists often refer to the ADP report to fine-tune their expectations for the payrolls numbers, though it is not always accurate in predicting the outcome.
Deutsche Bank raised its forecast for Friday to 150,000 from 125,000, while Capital Economics upped its expectations to 140,000 from 100,000.
One economist, however, cautioned that the ADP number has a tendency to overshoot in November and warned against building too much optimism ahead of the Friday report.
“A seasonal adjustment quirk typically -- six of the past seven years -- generates November ADP readings well above the underlying trend,” Ian Shepherdson, chief U.S. economist at High Frequency Economics, wrote in a note.
“In 2010 and 2011 ADP was an average of 64,000 better than the prior three-month average, so applying the same margin today suggests the ’real’ November ADP number was 140,000.”
Shepherdson said he was maintaining his forecast for a gain of 125,000 payrolls.
Macroeconomic Advisers’ Joel Prakken said he didn’t see any evidence of seasonal affects in the day’s data.
“I don’t see any technical or seasonal reason to question the momentum in today’s numbers,” Prakken told a conference call of journalists. Macroeconomic Advisers jointly developed the report with ADP.
The data helped boost U.S. stocks, as indexes rallied following coordinated action by central banks to prevent a lack of liquidity in the global financial system.
