Finally, the news that economists, politicians and consumers all were hoping for has arrived: According to a report from ADP Employer Services, companies in the U.S. increased their payrolls in December by the largest amount since records began in 2001.
Employment jumped by 297,000 in December, adding to the upwardly revised 92,000 jobs that were created in November. According to Bloomberg, the jobs numbers far exceed even the loftiest of expectations of the economists the news organization surveyed – their median estimate called for a 100,000 gain. A Labor Department report is expected on Friday that will show companies added 150,000 workers, lowering the unemployment rate from 9.8 percent to 9.7 percent.
U.S. businesses have reported upbeat earnings in the past few quarters, but were loath to hire additional workers until they felt the economy had turned the corner; it seems that the time could be here, according to Jim O'Sullivan, the global chief economist at MF Global Ltd. O'Sullivan affirms: "Companies have been pretty cautious and they've accumulated a lot of spending power, and we've seen that in purchases of equipment and software. Now they need more workers to man the equipment."
While the ADP is not the official arbiter of the U.S. economy's job market, it has – in its six past monthly reports – closely mirrored the official statistics the Labor Department later released, though in July and October it understated job gains by 29,000 during the former and 116,000 during the latter.
The ADP report utilizes data from 340,000 businesses that employ more than 21 million workers.