U.S. Companies Added More-Than-Estimated 187,000 Jobs in January, ADP Says
U.S. Companies Added 187,000 Jobs in January
Tim Boyle/Bloomberg
A worker assembles a 2011 Ford Motor Co. Explorer at a plant in Chicago.
A worker assembles a 2011 Ford Motor Co. Explorer at a plant in Chicago. Photographer: Tim Boyle/Bloomberg
Companies in the U.S. added more workers than forecast to payrolls in January, showing a pickup in the labor market, data from a private report showed today.
Employment increased by 187,000 last month after a revised 247,000 gain in December that was less than initially estimated, according to figures from ADP Employer Services. The median estimate in the Bloomberg News survey called for a 140,000 gain last month.
Bigger payroll gains are needed to help bring down an unemployment rate that Federal Reserve policy makers say is too high. A Labor Department report in two days is forecast to show companies added 140,000 jobs in January, while the jobless rate rose to 9.5 percent.
“I see a clear pattern of strengthening, acceleration here that is very encouraging,” Joel Prakken, chairman of Macroeconomic Advisers LLC, which produces the figures with ADP, said on a conference call. “The economy is starting to accelerate.”
Estimates in the Bloomberg survey of 33 economists ranged from a decline of 100,000 to an increase of 200,000.
Stocks declined after the report, with the Standard & Poor’s 500 Index falling 0.2 percent to 1,304.59 at 9:48 a.m. in New York. Treasuries rose, pushing down the yield on the benchmark 10-year note to 3.42 percent from 3.44 percent late yesterday.
Job-Cut Announcements
Job cuts announced by U.S. employers dropped in January by 46 percent to 38,519, according to Challenger, Gray & Christmas. The Chicago-based placement firm said it marked the fewest job cuts for any January since record-keeping began in 1993.
Over the previous six reports, ADP’s initial figures were closest to the Labor Department’s first estimate of private payrolls in July, when it understated the gain in jobs by 29,000. The estimate was least accurate in December, when it overestimated the employment gain by 184,000.
After ADP initially reported a 297,000 jump in company payrolls for December, the biggest gain since records began in 2001, some economists raised their private jobs forecast before the Labor Department’s figures. When those figures were released two days later, they were weaker than forecast.
Today’s ADP report showed an increase of 21,000 workers in goods-producing industries, which includes manufacturers and construction companies. Service providers added 166,000 workers.
Factory Employment
Employment at factories increased 19,000 jobs, ADP said.
Companies employing more than 499 workers expanded their workforces by 11,000 jobs. Medium-sized businesses, with 50 to 499 employees, created 79,000 jobs and small companies increased payrolls by 97,000, ADP said.
Ford Motor Corp. and Norfolk Southern Corp. are among companies planning to increase payrolls this year. The Dearborn, Michigan-based automaker plans to hire more than 7,000 workers in the next two years, including engineers with expertise in battery-powered cars, Mark Truby, a company spokesman, said in an interview in Detroit on Jan. 10.
The economy accelerated at the end of 2010 as consumer spending climbed by the most in more than four years. Gross domestic product grew at a 3.2 percent annual rate, Commerce Department figures showed Jan. 28.
“Our service levels have improved and we’re continuing our targeted hiring and bringing on new locomotives in anticipation of future growth,” Charles Moorman, chief executive officer at Norfolk Southern, said on a Jan. 25 teleconference. “Looking ahead to 2011, we expect to handle increased business.”
January Employment
Overall payrolls probably rose by 142,000 in January, according to the median forecast of economists surveyed before the Labor Department’s Feb. 4 report. The forecasts for the private and total payrolls are almost the same because government employment may have been little changed last month.
Fed policy makers said after their latest meeting Jan. 26 that improvements in the economy didn’t meet the threshold for scaling back their plans to purchase $600 billion in bonds to help bring down an unemployment rate that’s above 9 percent.
“The economic recovery is continuing, though at a rate that has been insufficient to bring about a significant improvement in labor market conditions,” the Fed said.
The ADP report is based on data from about 340,000 businesses employing more than 21 million workers.
To contact the reporter on this story: Bob Willis in Washington at bwillis@bloomberg.net
To contact the editor responsible for this story: Christopher Wellisz at cwellisz@bloomberg.net
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