--ADP says private businesses added 215,000 jobs in December
--Strong ADP report adds upside risk to Friday's payrolls
number
--Jobless claims jump in latest week but tally may be skewed by
holiday
A strong report on private-sector hiring in December released
Thursday overshadowed a jump in jobless claims last week, providing
an upside risk to the widely watched U.S. employment report
scheduled for Friday.
Private-sector jobs in the U.S. increased 215,000 last month,
according to a national employment report calculated by payroll
processor Automatic Data Processing Inc. (ADP) and forecasting firm
Moody's Analytics.
Economists surveyed by Dow Jones Newswires expected ADP to
report a gain of 150,000 private jobs.
The November job gain was revised higher to 148,000 from 118,000
reported a month ago.
Also on Thursday came news from the Labor Department that new
filings for jobless benefits ended 2012 at a higher-than-expected
level.
New unemployment claims jumped by 10,000 to a seasonally
adjusted 372,000 in the week ended Dec. 29. The prior week's figure
was revised up to 362,000. Economists surveyed by Dow Jones
Newswires expected 363,000 new benefit applications last week.
Claims are usually volatile during holiday periods, but the
measure of layoffs is still trending below year-prior levels. The
four-week moving average of claims, which smoothes out volatile
weekly data, was 360,000 last week. A year earlier, the four-week
average stood at 377,000.
"The claims data are not always reliable labor market indicators
around the holiday season because of issues seasonally adjusting
the data, but it is still a somewhat encouraging sign to see the
trend in the data remain relatively low," said JPMorgan Chase Bank
economist Daniel Silver.
Technical problems at the end of the year are also an issue for
the ADP report, said Mark Zandi, chief economist at Moody's
Analytics that compiles the ADP data. Even so, he said the report
was "very good, very solid."
The fiscal-cliff debate during December didn't seem to have done
damage to the labor markets, Mr. Zandi said.
According to ADP, firms employing between one and 49 workers
increased jobs by 25,000 in December. Medium-sized businesses with
payrolls of 50 to 499 workers hired 102,000 new employees. Among
large firms, businesses with 500 or more employees created 87,000
new positions.
Service-sector jobs increased by 187,000 last month, but factory
jobs lost 11,000 slots.
Construction jobs jumped by 39,000 last month, most likely
reflecting rebuilding after superstorm Sandy, the report said.
Investors and economists view the ADP report as an indicator for
the all-important tally of nonfarm payrolls to be released Friday
by the Bureau of Labor Statistics. However, the two reports vary
widely.
The ADP survey tallies only private-sector jobs. The BLS's
nonfarm payroll data, to be released Friday, include government
workers.
ADP's new methodology is geared toward capturing where nonfarm
payrolls count will be revised to, not necessarily the initial
reading of jobs as reported by the BLS.
After seeing the very strong ADP report, a few economists
revised higher their expectations for Friday's payroll numbers.
Forecasters at Goldman Sachs now expect a large 200,000 gain,
and Credit Suisse is calling for a 185,000 increase.
Even so, the median forecast from all economists surveyed by Dow
Jones Newswires calls for a payrolls increase of 150,000 in
December.
Last month's jobless rate is projected to hold at 7.7%.
ADP, of Roseland, N.J., offers payroll processing, human
resource and benefit administration services to about 600,000
clients worldwide. Economics firm Moody's Analytics is a subsidiary
of Moody's Corp.
In other job-related news Thursday, the number of job cuts
announced in December dropped 43% to 32,556, the second lowest
monthly tally in 2012, according to outplacement firm Challenger,
Gray & Christmas.
The firm also said layoff announcements totaled 523,362 for all
of 2012, the lowest 12-month job-cut total since 1997.
Write to Kathleen Madigan at kathleen.madigan@dowjones.com and
Eric Morath at eric.morath@dowjones.com.
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