Employers in the private sector boosted their workforce by 241,000 jobs last month, according to payroll giant ADP, in a further indication of an improving economy.
[IMGCAP(1)]Small businesses accounted for 106,000 new jobs, including 46,000 at companies with between one and 19 employees and 60,000 at businesses with between 20 and 49 employees.
Midsize businesses with between 50 and 499 employees added 70,000 jobs. Large businesses added 66,000 jobs, including approximately 22,000 at companies with between 500 and 999 employees and 43,000 at businesses with 1,000 employees or more.
“Private sector payrolls are growing at a solid pace, and this is enough to absorb unemployed workers and tighten the labor market,” said Ahu Yildirmaz, vice president and head of the ADP Research Institute, in a conference call with reporters Wednesday. “The 241,000 jobs generated this month are about twice as many as needed to satisfy the growing working-age population. We have been getting these numbers of 200,000 monthly job gains on a fairly consistent basis for the past 12 months, so we close the year with about 2.5 million additional jobs for the entire year.”
The service sector accounted for 194,000 jobs in December, up from 187,000 in November, while the goods-producing sector added 46,000 jobs, up from 40,000 in November.
The professional and business services sector, which includes accounting, tax preparation and other types of services, contributed 69,000 jobs in December, up from 37,000 in November. The 16,000 new jobs added in financial activities was well above last month’s 5,000 and represented the largest monthly gain for 2014 in that sector.
The construction industry added 23,000 jobs, up from last month’s gain of 20,000. Meanwhile, manufacturing added 26,000 jobs in December, well above November’s 16,000 and the second highest monthly total of 2014 in that sector. Expansion in the combined trade, transportation and utilities sector grew by 44,000, down from November’s 54,000. Franchise businesses added 38,000 jobs in December.
“All sectors and firm sizes added to the net gains, and it seems like plunging gas prices are boosting consumer-dependent industries,” said Yildirmaz. “The fact that the job gains are not focused on specific industries is a good sign of the overall health of the economy. Given the recent slide in oil prices and consumer confidence being higher, the overall labor market is really performing well, but I think the missing piece for the stronger economy is still the real wage growth that we have not seen fully yet.”
However, she noted that there were some early indications in the jobs data last month from the U.S. Bureau of Labor Statistics showing some slight improvement in wages, and ADP’s own Workforce Vitality Report also showed some acceleration in wages.
“The job market continues to power forward,” said Mark Zandi, chief economist of Moody’s Analytics, which compiles the monthly employment report with ADP. “Businesses across all industries and sizes are adding to payrolls. At the current pace of job growth, the economy will be back to full employment by this time next year.”
[IMGCAP(2)]
