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ADP Surprises to the Upside

All Eyes Shift to Friday's Number

Written by Brian Hicks
Posted January 5, 2011 at 10:31AM

bullish

Here's one for the bulls. ADP has surprised to the upside this morning.

Are happy days here again? Only time will tell.

Either way, more jobs beats fewer jobs any day of the week.

From Reuters by Jonathan Spicer entitled: Surprise Jobs surge boost economic outlook

“A surprise surge in private-sector employment last month to its highest level on record provided the most bullish signal in months that the economy is slowly mending.

Private employers added 297,000 jobs in December, triple the median estimate by economists and up from the gain of 92,000 in November, an ADP Employer Services report showed on Wednesday.

"You cannot ignore the strength of this report," Tom Porcelli, a U.S. economist at RBC Capital Markets. "With small business now beginning to start to ramp up hiring, it's safe to feel better about the labor backdrop."

Adding to the rosy picture, the number of planned layoffs at U.S. firms fell last month to the lowest level in 10 years, according to a report by consultants Challenger, Gray & Christmas Inc.

The ADP figures came ahead of the government's much more comprehensive labor market report due on Friday, which will include both public and private sector employment.

That report is expected to show a rise in overall nonfarm payrolls of 140,000 in December, based on a recent Reuters poll of analysts, but a rise in private payrolls of 145,000.

Economists often use the ADP report to fine-tune their forecasts for the payrolls numbers, though it is not always accurate in predicting the outcome.”

All eyes have now shifted to the Friday BLS number....

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