Automatic Data Processing (NasdaqGS:ADP - News) reported the creation of 170K jobs in January, which was in-line with expectations. On the negative side, the jobs numbers for December were revised downwards by 33K to 292K. The big deceleration from the December notwithstanding, the ADP report is still ahead of expectations for private sector jobs in Friday’s government jobs report.
The gains were broad based across industries and business sizes. More than half of the January job gains came from businesses with less than 50 employees. Medium sized businesses, those with less than 500 employees, accounted for most of the rest of the gains.
The ADP report sets the tone for Friday’s government jobs report, which is expected to show headline job gains of around 130K. The drop from the December level, when 200K jobs were created, primarily reflects the reversal of one-time gains that month due to seasonal factors. The overall trend on the labor market front remains favorable as confirmed by the steady downtrend in the weekly Jobless Claims data.
Do you think the market will find today’s inline ADP number good enough to sustain January’s positive momentum?
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