Private hiring jumps in December despite fiscal worries
NEW YORK (Reuters) - Private-sector employers added more new jobs than expected last month even as a potential budget crisis loomed, helping the job market end 2012 on a high note, a report by a payrolls processor showed on Thursday.
The ADP National Employment Report showed the private sector added 215,000 jobs in December, comfortably above economists' expectation of a 133,000 gain.
The increase came even as companies worried the economy might fall off a "fiscal cliff" at year end, which would have meant higher taxes and, some predicted, suppressed hiring.
"All the labor market data...has held up very, very well so (there is) no sign of the fiscal cliff impact on the job market," Mark Zandi, chief economist at Moody's Analytics, told CNBC television. The ADP report is jointly developed with Moody's Analytics.
On a conference call about the results, he said the report showed "the resilience of the economy in the face of some pretty significant uncertainty with regard to what's been going on in Washington," adding "I expected more of an impact on the job market than we have observed."
A last-minute deal to avoid going over the fiscal cliff was struck on New Year's Day, though decisions on some important spending issues were delayed rather than decided.
"The underlying economy has momentum, and the employment data confirms that," said John Brady, managing director at R.J. O'Brien & Associates in Chicago. "The hope and prayer of the market is that our political leaders don't screw it up."
A revival in new construction jobs was also a hopeful sign, Zandi said, though the gains were likely boosted by rebuilding efforts after Superstorm Sandy hit the U.S. East Coast in October.
November's private payrolls tally was also revised upward to show a gain of 148,000 from the previously reported 118,000.
The ADP data has had a mixed track record when it comes to predicting changes in the Bureau of Labor Statistics' more comprehensive payrolls data. The December report, due on Friday, is expected to show the economy added 150,000 jobs last month after adding 146,000 in November.
"In terms of implications for the payrolls report tomorrow, we tend to discount this a little bit, especially around the turn of the year, because ADP tends to be very volatile in December in particular," said Yelena Shulyatyeva, U.S. economist at BNP Paribas in New York.