Reaction to GDP and ADP

NEW YORK (Reuters) - U.S. growth skidded lower in the fourth quarter and was the weakest in five years for all of 2007, according to a government report on Wednesday that highlighted the toll an enfeebled housing sector has taken on the national economy.

U.S. private employers added 130,000 jobs in January, a report by a private employment service said on Wednesday.

ADP Employer Services, whose employment report was jointly developed with Macroeconomic Advisers LLC, also said it revised downward the number of jobs created in December to 37,000 from 40,000.

COMMENTS:

IAN SHEPHERDSON, CHIEF U.S. ECONOMIST, HIGH FREQUENCY ECONOMICS, VALHALLA, NEW YORK:

ADP:

"ADP has proved itself horribly misleading several times over the past year but the fact remains that it is the best (least bad, anyway) single advance indicator of payrolls.

Accordingly we are inclined to move up our estimate for the official headline number on Friday to 100,000 from 50,000. The trend in core payroll growth is slowing and will soon dip into negative territory, but in any given month, anything can happen."

PETER BOOCKVAR, EQUITY STRATEGIST, MILLER TABAK & CO., NEW YORK:

ADP:

"These numbers are only relevant in whether it influences or changes what the Fed was going to do today. Certainly the ADP number was a surprise to the upside, but we need to see other job data points... ADP in the November-December time frame has had some issues with seasonality, so we'll see whether it's corroborated by Friday's payrolls number.

GDP:

"No question the GDP number tells us the economy is on the brink of recession, if not in one already. I think it gives the Fed all the cover it thinks it may need to get away with cutting 50 bps without engendering criticism of panicking."

RICHARD DEKASER, CHIEF ECONOMIST, NATIONAL CITY CORP., CLEVELAND:

GDP:

"It's a bit disappointing. I came in less than half of what I was expected. The 2-percent growth in consumer spending is quite a below where I was.